☕ Three things to do today after the Fed’s nothing-burger

Good morning! 👋 

It’s Hayley here, and while Keith is enjoying some family time in Japan, I’m stepping in with something I think you’ll appreciate. 

I’m seeing that futures are split on my screen this morning, but they'll probably jump around until markets open. 

The Dow is green while S&P 500 and Nasdaq futures are red.  

Makes perfect sense.  

There are two opposing forces at work here. 

Oracle’s weak earnings and its massive jump in AI spending have reignited worries about an AI slowdown, which is dragging the S&P 500 and Nasdaq lower. (Read) 

At the same time, the Fed’s rate cut and its return to Treasury buying are giving value and the more traditional sectors a lift, which is helping the Dow. (Read) 

Let's spend a moment on this.  

Yes, the Fed cut rates again - another 0.25%, bringing them down to 3.50%–3.75%.  

It’s the third cut this year and 1.75% in total since late 2024.  

Wall Street will act like this is a turning point. There’s lots of chatter happening about the public dissent, the growing disagreement inside the building and the fact that the Fed will be buying Treasuries again (beginning with $40 billion in T-bills). 

But really, while there’s a lot of noise, it’s a nothing-burger... exactly as Keith has been saying for months. 

Sure, markets will move in the initial moments, as they always do, but take a look at this. 

The Fed has never been able to permanently derail the stock market's long-term upward trend. 

• In 1994, the Fed doubled rates - the market went sideways, then surged more than 250% over the next five years. 
• From 2001–2003, the Fed slashed rates from 6.5% to 1% - the market still fell first, then doubled into 2007. 
• In 2007–2009, the Fed was “too slow” to cut - markets crashed anyway, then began a decade-long 400% rally. 
• In 2013, the Fed merely hinted at tapering - headlines panicked, the S&P still returned 32%. 
• Between 2015 and 2018, the Fed hiked steadily from 0% to about 2.5% - stocks kept rising, including multiple +20% and +30% years. 
• In 2020, the Fed cut rates to zero - markets crashed, then hit new highs within months. 
• In 2024, the Fed paused and pivoted to cuts - and the market still pushed to fresh records. 

Zoom out across decades of hikes, cuts and pauses, and the story doesn’t change: the S&P 500 keeps moving up and to the right. 

Why?  

Because the Fed doesn’t create value. Businesses do. People do. Innovation does. 

So, what to do? 

Keith would tell you to do 3 things today: 

1. Focus on what you can control and know to be true 
2. Play to win, not “not” to lose 
3. Invest accordingly 

With that, you got this – I promise! 💯 

As always, let’s MAKE it a great day. 

Hayley E 😀