Fed Is All But Decided On September Rate Cut: Here's Why It May Not Provide The Lift Wall Street Is Betting On
Portfolio Pulse from Shanthi Rexaline
The Federal Reserve is expected to cut interest rates in September due to weak economic data and improved pricing pressure. Historical patterns suggest that such rate cuts may not lead to sustained market rallies, as seen in 2001 and 2007. The SPDR S&P 500 ETF Trust (SPY) has gained 19% year-to-date, but the impact of the anticipated rate cut remains uncertain.
August 26, 2024 | 7:26 am
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The SPDR S&P 500 ETF Trust (SPY) has gained 19% year-to-date, but the anticipated Fed rate cut in September may not lead to a sustained rally, based on historical patterns from 2001 and 2007.
The SPY ETF, which tracks the S&P 500, has seen significant gains this year. However, historical data from previous rate cuts in 2001 and 2007 indicate that initial market rallies were followed by significant downturns. This suggests that while a short-term bounce may occur, the long-term impact could be neutral or negative.
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