Published On Sep 18, 2024, 3:15 PM
The Federal Reserve has implemented a half-point cut to interest rates and indicated the possibility of two more cuts later in the year. This decision aims to stimulate economic growth amid ongoing concerns about inflation and market volatility.
Positive
Interest rate cuts generally lead to a lower cost of borrowing, which could spur economic growth. Sectors benefiting from such cuts typically include utilities, real estate, and consumer discretionary stocks. Increased consumer spending and business investments are likely.
Negative
Financials, particularly banks, tend to perform poorly when interest rates are lowered, as it compresses their net interest margins. Investors might want to be cautious with bank stocks in the upcoming months.
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Andersen Capital Management CIO Peter Andersen joins 'Mornings with Maria' to discuss big bank earnings and weighs in on the Federal Reserve's handling of rate cuts.