One question we’ve been fielding from many investors recently relates to whether the Fed will cut when U.S. equity markets are at, or near, all-time highs.
As our ever data driven Senior Macro analyst Darius Dale highlighted during The Macro Show yesterday, the short answer is yes. This occurs frequently.
In fact, as the Chart of the Day below shows, this is almost always the case for initial interest rate cuts. So, to the extent you think the stock market will prevent P.E. Powell from cutting rates, it will not. Conversely, a market sell-off will almost certainly force his hand.