…simply stayed invested in the S&P 500 the whole time. This chart underscores the importance of staying invested for the long term, regardless of political cycles or short-term market fluctuations.\”
Overall, the calls for the Fed to begin cutting rates sooner rather than later seem to be gaining momentum. With economic growth slowing, inflation under control, and warning signs emerging, a rate cut may be warranted to help bolster growth and mitigate risks of a recession.
While the significance of a first rate cut may be overblown, the Fed has room to be nimble and manage expectations for future policy changes. History shows mixed results after an initial rate cut, but if the economy holds up, the outlook for stocks could be positive.
As the Fed prepares for its upcoming policy meetings, the market is sure to react to any decisions made. However, a 25-basis-point rate cut from a relatively high target range seems inconsequential compared to past rate adjustments. With economic and financial market activity relatively healthy, a rate cut may be a prudent move to support continued growth.