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What happens when the Fed cuts rates with no recession announced?
It has happened 26 times since 1980. A year after it began, the S&P 500 was up 21 of 26 times, with a median move of +14.0%. On an ordinary day in the same years the median was +12.2%, up 79% of the time.
a Fed rate cut in the last 30 days · not in an announced recession. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +0.4% 62% up · n 26 · normal +1.3% | +14.0% 81% up · n 26 · normal +12.2% | +31.2% 88% up · n 24 · normal +35.4% |
| Gold | +2.6% 58% up · n 26 · normal +0.0% | +2.2% 58% up · n 26 · normal +3.0% | +3.8% 50% up · n 24 · normal +9.2% |
| Oil | +0.4% 54% up · n 26 · normal +0.3% | -2.0% 46% up · n 26 · normal +0.2% | -4.2% 46% up · n 24 · normal +5.9% |
| 10-year yield (pts) | -0.06 pts 42% up · n 26 · normal -0.02 pts | +0.25 pts 58% up · n 26 · normal -0.18 pts | -0.69 pts 38% up · n 24 · normal -0.59 pts |
| Inflation, CPI y/y (pts) | -0.06 pts 39% up · n 23 · normal -0.01 pts | -0.24 pts 42% up · n 26 · normal -0.08 pts | -0.54 pts 46% up · n 24 · normal -0.36 pts |
| Unemployment rate (pts) | 0.00 pts 36% up · n 22 · normal 0.00 pts | -0.05 pts 46% up · n 26 · normal -0.30 pts | -0.15 pts 42% up · n 24 · normal -0.90 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
- 2025-09-18 · true for 63 trading days · S&P 500 a year later: +15.4%
- 2024-09-19 · true for 61 trading days · S&P 500 a year later: +16.6%
- 2020-03-04 · true for 29 trading days · S&P 500 a year later: +20.4%
- 2019-08-01 · true for 65 trading days · S&P 500 a year later: +10.8%
- 2008-10-08 · true for 36 trading days · S&P 500 a year later: +8.2%
- 2007-09-18 · true for 132 trading days · S&P 500 a year later: -23.9%
- 2003-07-17 · true for 6 trading days · S&P 500 a year later: +12.2%
- 2001-01-03 · true for 181 trading days · S&P 500 a year later: -13.5%
- 1998-09-29 · true for 55 trading days · S&P 500 a year later: +20.9%
- 1995-12-19 · true for 41 trading days · S&P 500 a year later: +19.5%
- 1995-07-06 · true for 22 trading days · S&P 500 a year later: +18.7%
- 1990-10-29 · true for 106 trading days · S&P 500 a year later: +29.7%
- 1990-07-13 · true for 21 trading days · S&P 500 a year later: +3.5%
- 1989-10-19 · true for 53 trading days · S&P 500 a year later: -10.0%
- 1989-06-06 · true for 57 trading days · S&P 500 a year later: +12.6%
- 1988-01-28 · true for 31 trading days · S&P 500 a year later: +16.0%
- 1987-11-04 · true for 21 trading days · S&P 500 a year later: +12.1%
- 1987-07-02 · true for 21 trading days · S&P 500 a year later: -11.1%
- 1986-07-11 · true for 42 trading days · S&P 500 a year later: +27.3%
- 1986-03-07 · true for 42 trading days · S&P 500 a year later: +28.9%
- 1985-12-18 · true for 20 trading days · S&P 500 a year later: +17.6%
- 1985-04-25 · true for 60 trading days · S&P 500 a year later: +32.1%
- 1984-09-20 · true for 86 trading days · S&P 500 a year later: +8.7%
- 1983-08-17 · true for 42 trading days · S&P 500 a year later: -0.9%
- 1981-11-02 · true for 40 trading days · S&P 500 a year later: +10.7%
- 1980-05-29 · true for 3 trading days · S&P 500 a year later: +20.2%
- 26 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.
- How these numbers are made.
More about events
- What happens after the Fed cuts rates?
- What happens after the Fed raises rates?
- What happens when the Fed cuts rates during a recession?
- What happens when the Fed has not raised rates for a year?
- What happens after a bank failure?
- What happens to markets after a war or attack?
- What happens after a market crash?
- What happens during a government shutdown?