BMO: STOCKS OFTEN RISE AFTER FED CUTS
BMO Capital noted that U.S. equities usually gain after the Federal Reserve starts cutting rates. Since 1982, the S&P 500 posted positive returns in 8 of 10 cycles, averaging +10.4% over the following year. Outcomes, however, ranged from –23.9% to +32.1%, depending on whether cuts extended growth or failed to prevent recession.BMO said today’s backdrop looks more like the positive cases: jobs are still growing, GDP is above trend, and S&P 500 earnings are forecast to rise at a double-digit pace through 2026.The firm argued that the debate over the size of Fed cuts “misses the point.” Unless the economy breaks, U.S. stocks remain in a bull market—though future gains may be smaller given the strong rally so far.The copyright of this article belongs to the original author/organization.
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