What Happens to Stocks After the First Rate Cut?
The Federal Reserve (Fed) last raised interest
rates between 5.25% and 5.5% in July 2023 and
has since been on hold. Keeping our economy
healthy is at the core of the Fed’s responsibilities.
The Fed does this through its dual mandate of
price stability and maximum employment. Price
stability focuses on ensuring inflation remains low
and stable, and maximum employment helps the
economy grow by keeping as many people
employed as possible.
The Fed has held interest rates higher as it aimed
to slow the U.S. economy and curb inflation
through higher borrowing costs. Progress has
been made on this dual mandate. Inflation has
fallen, but the economy has also cooled as the
number of jobs created is falling and the
unemployment rate ticked to 4.3%.