The Fed Just Flagged Its First Interest Rate Cut Since March 2020. It Might be Bad News for Stocks.

"The time has come for policy to adjust." Those were the words of Federal Reserve Chairman Jerome Powell on Friday at the annual Jackson Hole Economic Symposium. The Fed has been locked in an intense battle to tame inflation, which hit a 40-year high in 2022 when the Consumer Price Index (CPI) soared to 8%. That was far above the Fed's annual target of 2%, and the central bank responded with the most rapid string of interest rate hikes in its history.But inflation has cooled significantly this year, and the Fed is now set to cut the benchmark federal funds rate for the first time since March 2020. While lower rates can be great for stocks over the long term, history suggests the initial response in the S&P 500 (SNPINDEX: ^GSPC) index might actually be negative.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool