US Federal Reserve Rate Cut: The Federal Reserve is expected to initiate its first-rate cuts since the pandemic, aiming to ease borrowing costs from their highest levels in decades. Markets are projecting about 250 basis points of easing by the end of 2025. Investors are focused on whether these cuts will happen early enough to prevent a potential recession. Historically, rate cuts may not fully support corporate profits or offset market uncertainty Reuters if the economy enters a recession.
Market Response: The S&P 500 has seen mixed results following rate cuts, depending on whether the economy was in a recession. A downturn typically results in a stock market slump, while a rate cut during non-recessionary periods could boost equities. Treasury bonds usually perform well during rate cuts, providing safety for investors. The dollar’s strength post-rate cut will depend on the state of the U.S. economy compared to other countries and central banks' responses globally Reuters.
Source: https://www.reuters.com/graphics/USA-MARKETS/RATES/jnvwamonqvw/
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