Stocks to buy

The Fed Just Opened a Door to Stunning Stock Gains

Today, the U.S. Federal Reserve officially began its first rate-cutting cycle in four long years – and with a “bang,” no less. 

In our view, this bold move opens the door for stocks to party like it’s the 1990s all over again.

The big news here, of course, is that the Fed has cut interest rates by a whopping 50 basis points (bps). That’s uncommon. Typically, the central bank cuts in 25-bp increments. Jumbo 50-bp moves are rare, typically reserved for when the Fed wants to really support the economy.

In other words, with today’s jumbo cut, the central bank is making it clear that the U.S. economy has its full support.

Indeed, in its updated Summary of Economic Projections, the Fed pointed to more rate cuts this year… more rate cuts next year… and more cuts the year after that. In total, the Federal Reserve is projecting another seven to eight rate cuts over the next two years.

And in the bank’s post-meeting press conference, Fed Board Chair Jerome Powell sounded very dovish. He expressed that if the economy begins to weaken unexpectedly, the Fed will cut rates even more aggressively than it’s forecasted.

Between that dovishness, the rate projections, and this initial jumbo cut, the Fed demonstrated that it will do everything it can to help the economy regain its strength over the next few years.

We think that’s exactly what will happen.

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