The Federal Reserve met last month and decided to begin easing monetary policy by lowering interest rates by .50% (50 bps). The Fed’s directional shift in policy is likely to support growth and bring stability to a slowing job market. Many market prognosticators believe this is going to extend the current market cycle. Looking in the rearview mirror, going back to 1973, there have been thirteen calendar years in which the Fed engaged in monetary easing (reducing interest rates). In those instances, the S&P 500 was up almost 5% on average in the one year after and had a positive return nearly 70% of the time.
