What to Expect for Equities When the Fed Cuts Interest Rates

The onset of the Federal Reserve’s easing cycle is typically positive for equities so long as the US economy avoids a recession. We expect this to be the case in the current cycle, although upside for equities is likely to be tempered by high aggregate valuations and slowing EPS growth.

What you will learn:

• We think rate cuts will help to support an ongoing broadening of performance. Cyclical sectors are likely to fare well as activity proves relatively resilient and small cap stocks should benefit as balance sheet pressures ease.