Transcript:
This is Money Talks with Chad Olivier, sponsored by Olivier Group.
Hi. I’m Chad Olivier, certified financial planner and CEO of Olivier Group. Today, let’s talk about the Federal Reserve cutting interest rates and what that means for the markets and the economy. The Fed’s move to lower rates is big news, but what does it really mean? We’re optimistic because we’re not currently in a recession, and and this shift in policy encourages borrowing, home buying, and business investment.
Historically, every time since the nineteen eighties when rates were lowered outside of a recession, the stock market saw positive returns one hundred percent of the time, and all indicators show that we are currently not in a recession. We see no recession on the horizon in the short term, but risk could rise six to twelve months down the road if the Fed doesn’t manage the labor market well. Currently, recession odds are around twenty five percent, but it’s not our base case. Interestingly, despite the uncertainty around how the Fed will cut rates, markets are reacting positively.
Since talk of bigger rate cuts, the S and P five hundred has risen, and small cap stocks are performing even better. So it seems the market doesn’t see this as a recessionary panic move, but rather a stimulus for growth. That’s why understanding how interest rates impact your portfolio is crucial. If you have questions about how this affects your financial plan, contact us at Olivier Group dot com. And that’s why money talks, the planning pays.
This has been money talks with Chad Olivier.
