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When the Fed cuts rate three times and pauses, history shows it works out great for stocks

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The Federal Reserve just cut interest rates for the third time this year and said it will likely pause from here. That scenario is usually very good for stocks.

CNBC used Kensho, a hedge fund analytics tool, to track what happened to the market after the Fed cut interest rates at least three times. In the past 25 years, this has happened on four occasions, and data show that when the third cut was the last cut, stocks got a healthy boost in the following year. When the third cut was followed by more cuts because the economy was slipping into a recession, stocks tumbled.

The central bank’s decision Wednesday to lower the overnight lending rate to a target range of 1.50% to 1.75% marks the…



Source cnbc.com

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