Stocks: When the Rate Music Stops

Should investors panic if the Fed halts its rate cuts? Maybe not, says S&P. History points to continued stock gains after past easing cycles

We all know that investors are anticipators. So it should come as no surprise that the Standard & Poor's 500-stock index advanced an average 19% during the 12 times since World War II after the Federal Reserve Board started a rate-cutting program. Indeed, the S&P 500 was higher 12 months after the first rate cut in 11 of the 12 observations, with 2001 being the only time in which the equity market benchmark was not higher a year after the initial cut.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.