Goolsbee: Until This Recent Rate Cut, Falling Inflation Has Meant Fed Has Been Tightening Policy; The Cut Of 50 Bps To Start Makes Sense; We Are Shifting Back To A Normal Dual Mandate Mode; We Are 100s Of Basis Points Above The Neutral Rate; If Conditions Continue Like This There Are A Lot Of Cuts To Come Over Next 12 Months; We Have A Long Way To Come Down To Get The Interest Rate To Something Like Neutral
Portfolio Pulse from Benzinga Newsdesk
Austan Goolsbee discusses the Federal Reserve's recent 50 basis point rate cut, indicating a shift back to a normal dual mandate mode. He suggests that if current conditions persist, more rate cuts are expected over the next 12 months to reach a neutral interest rate.
September 23, 2024 | 3:04 pm
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POSITIVE IMPACT
The Federal Reserve's recent 50 basis point rate cut and potential for further cuts could positively impact SPY, as lower interest rates generally boost stock market performance.
The SPY ETF, which tracks the S&P 500, is likely to benefit from the Federal Reserve's rate cuts. Lower interest rates typically encourage investment in equities, as borrowing costs decrease and fixed income yields become less attractive. This environment can lead to increased stock market activity and potentially higher prices for SPY.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80