Interest Rates Are About to Do Something They Haven't Done Since December 2024, and It Could Foreshadow a Surprising Move in the Stock Market

The U.S. Federal Reserve lowered the federal funds rate (overnight interest rate) three times between September and December last year, reversing some of its aggressive hikes from 2022 and 2023. The rate cuts were justified because inflation -- as measured by the Consumer Price Index (CPI) -- cooled from its 2022 levels, when it hit a 40-year high of 8%.The Fed has held interest rates steady this year, but with the CPI now a stone's-throw away from its annualized target of 2%, and the jobs market showing signs of weakness, Wall Street is betting that another cut is on the way in September.Although lower interest rates are typically good for the stock market, history suggests they could trigger some short-term volatility. Here's what it means for the benchmark S&P 500 (SNPINDEX: ^GSPC) index.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool