The Federal Reserve slashed interest rates by 50 basis points at the conclusion of its September policy meeting.
The Federal Reserve surprised Wall Street with a half-point rate cut on Wednesday, bringing its target range to 4.75% to 5%.Central bank policymakers trimmed interest rates by 50 basis points, marking its first cut in four years.Here's what changed in the new Fed statement
"The idea of, 'Gosh, I can lock in for three to five years — and you don't have to go out to 30 years — I can lock in these yields for the next three to five years.' I think it's a pretty compelling proposition," said Rieder, who manages theThe major averages flickered near the flatline as the Federal Reserve's rate decision approached. As of 1:39 p.m. ET, theThe Federal Reserve's high interest rate regime – with the current target range of 5.25% to 5.
What the stock market did historically after the first Fed rate cut depended largely on the economy, historical data shows. In total, across all cycles, the S&P 500′s performance in the aftermath of the first cut was largely positive but with some big misses when the economy turned down.ConocoPhillips
Using the CNBC Pro Stock Screener tool, we searched for stocks with a dividend yield above 3% and a low debt-to-equity ratio under 60%. So they have big payouts and are low debt loads, meaning they should be able to keep paying that dividend. They're also poised to see 10% or more upside, per analysts.Many investors are betting that the Federal Reserve will be able to stave off a recession as it eases monetary policy from current levels.
Wall Street will also delve into the Fed's"dot plot," where policymakers share their expectations for rates over the next few years. At the conclusion of this meeting, the central bank officials will also issue their Summary of Economic Projections, which includes forecasts for gross domestic product and inflation.The Federal Reserve is expected to make its first cut to interest rates on Wednesday after more than two years of tight monetary policy.
The Fed's tight policy has provided a silver lining to savers, however. The annual percentage yield on a five-year certificate of deposit has jumped to 2.87%, up from 0.5% in March 2022, according to Haver. Yields on money market funds have also jumped, sitting at 0.46% last week, versus the 0.08% paid just before the Fed began tightening policy in March 2022, Haver found.
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