After nearly two years of interest rate hikes aimed at cooling inflation, the Federal Reserve has officially changed course. In September, the Fed cut its benchmark rate by a quarter point to a range of 4.00%–4.25%, citing softening labor markets and growing risks to the broader economy. Core inflation is now running near 3%—well below its 2022 peak—and markets are betting on at least two more cuts before the end of the year (one did happen on Wednesday).
This marks a pivotal moment for investors. Falling rates can dramatically reshape the financial landscape, particularly for those focused on income generation and capital preservation. The early stages of an easing cycle often create both opportunity and confusion—because while lower rates can boost asset prices, they’re also a sign of a slowing economy. The key is knowing where to position yourself as the pendulum swings from tightening to easing. Read on.
This post originally appeared at Investing Daily.