What happened last time? › Interest rates
What happens after the Fed cuts rates 2 points in a year?
It has happened 34 times since 1955. A year after it began, the S&P 500 was up 25 of 34 times, with a median move of +12.4%. On an ordinary day in the same years the median was +10.1%, up 74% of the time.
Fed funds rate down more than 2 points over a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +2.0% 68% up · n 34 · normal +1.1% | +12.4% 74% up · n 34 · normal +10.1% | +30.4% 74% up · n 34 · normal +27.2% |
| Gold | 0.0% 31% up · n 32 · normal 0.0% | 0.0% 48% up · n 33 · normal +2.9% | 0.0% 42% up · n 33 · normal +10.4% |
| Oil | 0.0% 22% up · n 32 · normal 0.0% | 0.0% 33% up · n 33 · normal 0.0% | -6.3% 36% up · n 33 · normal +8.9% |
| 10-year yield (pts) | -0.02 pts 44% up · n 34 · normal +0.01 pts | -0.02 pts 50% up · n 34 · normal +0.08 pts | -0.15 pts 47% up · n 34 · normal 0.00 pts |
| Inflation, CPI y/y (pts) | -0.16 pts 24% up · n 34 · normal -0.00 pts | -0.53 pts 32% up · n 34 · normal +0.04 pts | -0.05 pts 44% up · n 34 · normal -0.04 pts |
| Unemployment rate (pts) | 0.00 pts 44% up · n 34 · normal 0.00 pts | +0.15 pts 50% up · n 34 · normal -0.20 pts | +0.30 pts 53% up · n 34 · normal -0.50 pts |
Median move after each episode began, how often it rose, and how many episodes had data. "Normal" is the same move from any trading day in the same years.
Every time it happened
- 2020-03-16 · true for 130 trading days · S&P 500 a year later: +66.1%
- 2009-09-15 · true for 4 trading days · S&P 500 a year later: +6.9%
- 2009-06-30 · true for 2 trading days · S&P 500 a year later: +12.1%
- 2008-01-31 · true for 309 trading days · S&P 500 a year later: -40.1%
- 2007-12-31 · true for 1 trading day · S&P 500 a year later: -39.3%
- 2001-05-15 · true for 295 trading days · S&P 500 a year later: -12.7%
- 1990-12-31 · true for 377 trading days · S&P 500 a year later: +26.3%
- 1990-04-19 · true for 5 trading days · S&P 500 a year later: +13.6%
- 1990-03-08 · true for 1 trading day · S&P 500 a year later: +10.2%
- 1987-12-30 · true for 2 trading days · S&P 500 a year later: +12.7%
- 1986-07-31 · true for 54 trading days · S&P 500 a year later: +35.0%
- 1985-03-26 · true for 127 trading days · S&P 500 a year later: +33.0%
- 1984-12-18 · true for 1 trading day · S&P 500 a year later: +24.8%
- 1982-04-27 · true for 309 trading days · S&P 500 a year later: +36.8%
- 1981-11-17 · true for 56 trading days · S&P 500 a year later: +13.9%
- 1981-03-13 · true for 24 trading days · S&P 500 a year later: -18.4%
- 1980-10-08 · true for 7 trading days · S&P 500 a year later: -7.1%
- 1980-06-25 · true for 8 trading days · S&P 500 a year later: +13.8%
- 1976-04-29 · true for 1 trading day · S&P 500 a year later: -3.6%
- 1974-11-14 · true for 268 trading days · S&P 500 a year later: +24.5%
- 1971-12-15 · true for 1 trading day · S&P 500 a year later: +20.0%
- 1970-06-23 · true for 222 trading days · S&P 500 a year later: +31.6%
- 1967-11-02 · true for 1 trading day · S&P 500 a year later: +11.6%
- 1967-08-25 · true for 3 trading days · S&P 500 a year later: +6.5%
- 1967-07-19 · true for 1 trading day · S&P 500 a year later: +8.3%
- 1967-03-29 · true for 1 trading day · S&P 500 a year later: -1.3%
- 1965-09-29 · true for 1 trading day · S&P 500 a year later: -15.2%
- 1964-10-14 · true for 1 trading day · S&P 500 a year later: +7.5%
- 1961-09-05 · true for 2 trading days · S&P 500 a year later: -14.5%
- 1961-03-13 · true for 44 trading days · S&P 500 a year later: +10.9%
- 1960-11-28 · true for 27 trading days · S&P 500 a year later: +28.1%
- 1960-09-19 · true for 8 trading days · S&P 500 a year later: +22.7%
- 1960-06-29 · true for 2 trading days · S&P 500 a year later: +13.3%
- 1958-01-29 · true for 70 trading days · S&P 500 a year later: +31.8%
- 34 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Try enough situations and one will look like an edge by chance.
- Macro numbers are as published at the time. Stocks include companies that later died.
More about interest rates
- What happens when the 10-year Treasury yield is above 5%?
- What happens when the 10-year Treasury yield is above 8%?
- What happens when the 10-year Treasury yield is below 2%?
- What happens after the 10-year yield rises 1 point in a year?
- What happens after the 10-year yield rises 2 points in a year?
- What happens after the 10-year yield falls 1 point in three months?
- What happens when the 2-year Treasury yield is above 5%?
- What happens when the 30-year Treasury yield is above 5%?