{"id":13355,"date":"2024-08-28T19:10:02","date_gmt":"2024-08-28T19:10:02","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13355"},"modified":"2024-08-28T19:10:03","modified_gmt":"2024-08-28T19:10:03","slug":"what-the-potential-fed-rate-cuts-mean-for-investors","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/what-the-potential-fed-rate-cuts-mean-for-investors\/","title":{"rendered":"What The Potential Fed Rate Cuts Mean For Investors"},"content":{"rendered":"\n<p><em>Hayley P. from Pocatello, ID asks: <\/em>Hi Mitch, with the comments from the Fed last week confirming lower interest rates, do you have some portfolio or financial moves to keep in mind heading into next month? Thank you.<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for sending in your question. Allow me to provide readers with context about \u2018lower interest rates\u2019 before diving into some ideas for portfolio\/financial moves.<\/p>\n\n\n\n<p>As I write, futures markets are pricing in a 100% chance of a 25-basis point cut to the benchmark fed funds rate at the September 17-18 Fed meeting. Markets see a 25% probability of a 50-basis point cut.<sup>1<\/sup><\/p>\n\n\n\n<p>As I\u2019ve written previously, markets have been wrong about rate cuts many times in the past couple of years, so these futures market projections should not necessarily be taken at face value. Federal Reserve Chairman Jerome Powell\u2019s direct comments, however, make September rate cuts seem more assured.<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\">Securing Your Retirement Amid 2024\u2019s Interest Rate Shifts<\/a><\/u><\/strong><\/p>\n\n\n\n<p>With headlines focusing on market uncertainty and potential rate cuts, don\u2019t let short-term news derail your retirement strategy.<\/p>\n\n\n\n<p>Instead of reacting to daily market fluctuations, I invite you to download our free guide, <strong><em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\"><u>4 Steps to Managing <\/u><\/a><\/em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\">Retirement Assets<sup>2<\/sup><\/a><\/u><\/strong> to concentrate on these key factors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Determining your expenses<\/li>\n\n\n\n<li>Determining your income<\/li>\n\n\n\n<li>Matching your income source with your goals and time frame<\/li>\n<\/ul>\n\n\n\n<p>Considering these factors can be a daunting task, but there are four simple steps that can help you plan for retirement! If you have $500,000 or more to invest, get the scoop on these simple steps with our guide. Click on the link below to get your copy today:<br>\u00a0<br><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\">Download \u201c4 Steps to Managing Your Retirement Assets!\u201d<sup>2<\/sup><\/a><\/u><\/strong><\/p>\n\n\n\n<p>At the Fed\u2019s annual gathering in Jackson Hole last week, Chairman Powell said \u201cWe [the Fed] do not seek or welcome further cooling in labor market conditions,\u201d adding that, \u201cthe time has come for policy to adjust.\u201d Though the Chairman did not use the words \u201crate cut\u201d specifically, that is what\u2019s implied here.<\/p>\n\n\n\n<p>The labor market cooling that Chairman Powell is referring to has to do with the unemployment rate rising from 3.4% in April 2023 to 4.3% in the latest July reading. Inflation has also been cooperating lately, with good readings across consumer and producer prices in July. According to the Fed\u2019s preferred inflation gauge, inflation was 2.5% in June, well within reach of the target 2%.<\/p>\n\n\n\n<p>As Chairman Powell summarized it, \u201cWe will do everything we can to support a strong labor market as we make further progress toward price stability.\u201d<\/p>\n\n\n\n<p>As far as portfolio or financial moves are concerned, we have not altered our outlook for stocks for the year, which remains constructive based on the expected earnings growth we expect to see in the next twelve months. If inflation and interest rates are both lower in the future than they are today \u2013 which we also expect \u2013 that would add to the bull case, in my view.<\/p>\n\n\n\n<p>As far as savings and\/or fixed income are concerned, investors should expect to start earning less on cash in the back half of this year. That might mean looking at T-bills or CDs for cash that you do not necessarily need tomorrow but also want to earmark as \u2018risk-free\u2019 emergency savings. It could also mean extending the duration on fixed income portfolios, but those types of decisions depend on your specific goals and objectives, as well as your risk tolerance, cash flow needs, and other factors.<\/p>\n\n\n\n<p>With these financial adjustments in mind, planning for retirement becomes even more crucial. Our exclusive guide, <strong><em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\"><u>\u201c4 Steps to Managing Your Retirement Assets<sup>3<\/sup><\/u><\/a><\/em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-4-steps-to-managing-retirement?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2024_08_29&amp;content=4_steps_to_managing_retirement_assets_guide\">\u201d<\/a><\/u><\/strong> provides clear steps to help you assess your expenses, align income sources with your goals, and confidently prepare for the future. In this guide, we share insight on how to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Determine your expenses<\/li>\n\n\n\n<li>Determine your income<\/li>\n\n\n\n<li>Match your income source with your goals and time frame<\/li>\n<\/ul>\n\n\n\n<p>&nbsp;<br>If you have $500,000 or more to invest, click on the link below to get your copy of \u201c4 Steps to Managing Your Retirement Assets.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fed Chairman Powell&#8217;s latest comments make a September rate cut seem likely. Mitch discusses potential added cuts and how they may affect investor strategy.   <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-13355","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13355"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13355\/revisions"}],"predecessor-version":[{"id":13357,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13355\/revisions\/13357"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}