$100 Invested In This Stock 20 Years Ago Would Be Worth $700 Today
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Will a deep interest rate cut definitely be bullish for risk assets? The market may be a little bit presumptuous.
Federal Reserve Chairman Jerome Powell sent an unusually clear message last Friday: interest rate cuts will begin soon and may continue in the foreseeable future. The market's response was equally clear: rate cuts are bullish for all asset classes, perhaps with the exception of the US dollar. However, the reality portrayed by traders, that deep rate cuts and a strong enough economy will boost risk assets, doesn't match history. 'If you want the Fed to start a aggressive rate-cutting cycle, be careful what you wish for,' warned Liz Ann Sonders, Chief Investment Strategist at Charles Schwab. Benchmark borrowing costs have dropped significantly.
