Published On Sep 6, 2024, 8:53 AM
The Federal Reserve is likely to cut interest rates for the first time since the pandemic, considering the latest jobs data which shows a slight decrease in unemployment but weaker-than-expected job growth. The job market is showing signs of slowing down, leading to uncertainty on whether the rate cut will be by a quarter or half percentage point during the upcoming meeting on September 17-18.
Positive
Considering that a rate cut can stimulate the economy by making borrowing cheaper, sectors like consumer goods, technology, and finance may gain from lower interest rates. A potential investment opportunity could be in Technology ETFs, which usually benefit from decreased cost of capital.
Negative
Conversely, traditional financial institutions such as banks often face margin compression when interest rates are lowered, likely leading to weaker financial performance in that sector. Therefore, a potential investment to short could be in bank stocks such as Bank of America.
Oct 10, 2024, 6:19 PM
Warren Buffett's Berkshire Hathaway cut its stake in Bank of America below an important level.
Oct 10, 2024, 10:52 AM
Inflation fell in September as gasoline prices declined and housing inflation moderated, according to the consumer price index.
Oct 10, 2024, 9:36 AM
September's Consumer Price Index will serve as the latest test of whether inflation will continue to ease as the Federal Reserve debates its next interest rate decision.