Interest Rates Just Did Something They Haven't Done Since March 2020, and It Could Foreshadow a Big Move in the Stock Market

The Federal Reserve has two objectives, as mandated by law. First, it aims to keep the Consumer Price Index (CPI) measure of inflation increasing by around 2% per year. Second, it tries to maintain full employment in the U.S. economy, although it doesn't have a specific target for the unemployment rate.The CPI soared to a 40-year high of 8% in 2022, triggering one of the most aggressive campaigns to hike interest rates in the Fed's history. Thankfully, it has cooled significantly since then, which allowed the Fed to reduce the federal funds rate in September, for the first time since March 2020.The central bank's projections point to even more cuts on the horizon, and history suggests a big move in the S&P 500 (SNPINDEX: ^GSPC) stock market index could follow -- but not in the direction you might expect.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool