S&P 500 After Initial Fed Rate Cuts Outside Of Recession Outside of recessions, U.S. stocks have tended to rise after the Fed’s first rate cut, with an average gain of 15% within 12 months. Image: BofA Predictive Analytics
First Major Fed Rate Cut – U.S. CPI vs. Unemployment Rate Can the Fed cut interest rates in response to the bank crisis? Image: Morgan Stanley Wealth Management
S&P 500 Around Emergency Fed Rate Cuts In recent history, the performance of the S&P 500 has been mixed after emergency Fed rate cuts. Image: Nordea and Macrobond
U.S. Emergency Fed Rate Cuts This charts puts the Fed’s emergency rate cut into perspective. Image: Oxford Economics
Fed Rate Cut – Overnight Indexed Swaps (OIS) Strip for FOMC Meetings over the Next 12 Months Traders see one more Fed interest rate cut this year. Image: Morgan Stanley Research
Range of Returns Two Years After Fed Rate Cut Historically, equities rally significally, when the Fed eases during soft patches. Image: Barclays Research
Break-Even Inflation Rate On 10-Year TIPS and Fed Rate Cut (Hike) If inflation expectations continue to fall or remain low, the Fed could probably cut rates further. Image: Gavekal
U.S.: Market Odds of A Fourth Rate Cut The Fed may be inclined to press the pause button in the “mid-cycle” policy easing. Image: Oxford Economics
Average S&P 500 Performance Following 3rd Fed Rate Cut In the Fed rate cutting cycle, the chart shows the average S&P 500 performance following a 3rd Fed rate cut, with less than two additional cuts, and two or more additional cuts. Image: Strategas
Dow Jones Industrial Average Around Second Fed Rate Cut This chart shows that a second rate cut has been bullish. On average, the Dow Jones Industrial Average has gained 19% over the next 12 months. Image: Ned Davis Research
Fed Rate Cut vs. ISM Manufacturing Index and ISM Non-Manufacturing Index Since 1997, when the ISM Manufacturing Index is below 50 and the ISM Non-Manufacturing Index is above 52, the Fed is less aggressive, with about 68bp of easing on average. Image: Goldman Sachs Global Investment Research