The one data point investors must not ignore right now

For the first time in four years, the world's most consequential central bank, the US Federal Reserve, has cut interest rates. Unusually for the Fed, the cut was double the regular size of an interest rate move. As a result, different asset classes had different reactions. 

For equities, which are priced for a soft landing/Goldilocks scenario, the move was met with cheers. The S&P 500 has since clocked its 41st and 42nd record highs in quick succession. Meanwhile, bond markets were left disappointed as the Fed signalled there will likely only be another two regular (25bps) sized rate cuts this year. But then again, bond investors have a unique way of strong-arming central banks into their view. If you need any proof of that, check out how the Reserve Bank of Australia tried to get out of yield curve control in 2022 (spoiler alert: It was messy.)

So what happens from here on out? How quickly will the Fed and other central banks cut interest rates? How will markets react? And how are Australian investors likely to be affected given the RBA may not cut the cash rate until February next year at the earliest?

To find out, Signal or Noise presents its latest episode - an episode aptly titled The first Fed rate cut has come... Now what?

Joining me and our resident economist Diana Mousina of AMP are two leading investors:

• Cameron McCormack, Portfolio Manager at VanEck
• Sally Auld, Chief Investment Officer at JBWere (and former Chief Economist for Australia at JPMorgan)

Note: This episode was taped on Wednesday 25 September 2024. You can watch the video, listen to the podcast, or read our edited summary here.