Prediction: Here's How the Fed's Next Announcement Will Change Things for 3 Major Artificial Intelligence (AI) Players

Few things have dominated the stock market narrative in recent years like the Federal Reserve. The central bank effectively controls interest rates, and its decision to ramp up rates in 2022 as fast as it had in more than a generation helped fuel the 2022 bear market.Rates have been steady for over a year now with the Fed funds rate hovering between 5.25% and 5.5%, but that is expected to change soon, almost certainly at the next Federal Reserve meeting in September.In a speech at an economic symposium in Jackson Hole, Wyoming, Fed Chair Jerome Powell said that the "time had come" to lower interest rates as inflation was steadily cooling and the labor market had softened considerably. Lower rates should boost AI stocks. Growth stocks like ones in the AI sector typically do better in a lower-interest rate environment because lower rates make earnings in the distant future more valuable, according to the discounted cash flow model, therefore lifting valuations for growth stocks.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool