This week’s Fed meeting resulted in a much-anticipated interest rate reduction of 25 bps, to a range of 4 percent to 4.25 percent. This move followed a nine-month pause in its rate-cutting cycle, which began a year ago. Historically, equity markets have responded favorably to rate cuts after a pause of six months or more. But it’s been a while since we last saw this pattern. The Fed has not resumed a reduction cycle after a lag of that duration since July 2003. Markets have changed a lot since then.
