CNBC used Kensho, a hedge fund analytics tool, to track what happened to the market after the Fed cut interest rates at least three times. In the past 25 years, this has happened on four occasions, and data show that when the third cut was the last cut, stocks got a healthy boost in the following year. When the third cut was followed by more cuts because the economy was slipping into a recession, stocks tumbled.
The FOMC removed a key clause that had appeared in post-meeting statements since June saying it was committed to "act as appropriate to sustain the expansion." This was replaced by a more muted commitment to "monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate," the statement said.
Between 1995 and 1996 and in 1998, the Alan Greenspan-led Fed cut interest rates three times and then stopped, in order to combat an economic downturn and sustain the expansion. In each of these cases the S&P 500 returned 24.76% and 19.39%, respectively, over the next year. Evercore ISI Chairman Ed Hyman, who has been ranked the top economist in Institutional Investor's annual poll for more than three decades, tolda three-cut series was the "magic sauce in the 1990s to get growth to stop slowing." The 1998 expansion ended up being the second-longest in history. The economy is currently in the longest expansion.
This chart shows 50/50 up vs down. Whats ur point?!
Uh. That chart shows it's a crap shoot at best.
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Source: CNBC - 🏆 12. / 72 Read more »