We are pleased to provide you with our Quarterly Market Review.

Well, it finally happened. After months of will-they-or-won’t-they speculation, the Federal Reserve cut interest rates in September. And it was a relatively big one: The half-percentage-point decrease was the biggest the Fed has made since its emergency rate reductions in March 2020 at the onset of the pandemic.

The good news: With these cuts, policymakers acknowledged the progress they’ve made in wrangling inflation, which peaked at 9.1% in June 2022 and hit 2.5% this August, nearing the Fed’s traditional 2% target rate. The Fed fell short of declaring all-out victory, but came close: “We know it is time to recalibrate our [interest rate] policy to something that’s more appropriate given the progress on inflation,” Fed Chair Jerome Powell said. “We’re not saying, ‘mission accomplished’…but I have to say, though, we’re encouraged by the progress that we have made.”

If you’re wondering what the big rate cut actually means for you and your money, you may get wildly different—and in some cases wildly misleading—answers depending on whom you ask. (Spoiler alert: Whatever you hear is not enough to risk disrupting your long-term investment plan.)  Fact is, it’s hard to know what will happen after the Fed cuts, in part because outcomes have varied in the past. It’s especially unclear what will happen given the extraordinary circumstances of the last few years.

Turning away from inflation and interest rate cuts, as the Presidential election was this week, we encourage you to separate personal political beliefs from your investment decisions.  Historically, stock market performance has shown no preference towards any one political party, as shown in the provided chart by Dimensional Fund Advisors.

With that, we wish you a lovely Fall and as always, we appreciate the trust and confidence you place in us.  If you have any questions or concerns, please reach out and let us know how we can help.

View PDF: Quarterly Market Review (QMR) – Q3 2024