Trading the Fed decision: These stocks could get the biggest boost from lower rates

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These stocks win when short-term interest rates decline, history shows.

Certain stocks should be winners as the Federal Reserve seeks to lower short-term rates, if history is any guide. The Federal Reserve on Wednesday kept rates unchanged as expected and noted progress it was making on inflation. Traders are betting the central bank is preparing markets for a rate cut at its next meeting in September. Short-term yields have been falling this week in anticipation of this Fed action. The 2-year Treasury yield is down about 6 basis points this week .

Pro screened for the stocks in the S & P 500 that tend to rise the most when short-term rates decline. These stocks could be winners if short-term rates continue to decline in the near future. We looked at the largest one-week declines in the 2-year Treasury yield over the last 12 months. The following stocks had the biggest median move during those weeks. We also scrubbed the list to take only stocks that were consistent winners — gaining during each of those weeks of falling yields.

 

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