facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
History of Interest Rate Cuts Thumbnail

History of Interest Rate Cuts

Posted on August 6, 2019 by John Posey

Below is an article from Ben Carlson that takes a look at historical interest rate changes. With the Fed cutting rates recently, I found it a timely conversation. Prior to last Wednesday’s 25 basis point Federal Funds rate cut, Ben finds that there were nearly 140 rate cuts since 1960, 30 double-digit stock market corrections and 8 recessions in the U.S. over that time. My primary takeaway is when Ben says, “In the short-term, any Fed actions likely provide more of a psychological impact on the markets than a lasting change in fundamentals.” In other words, it’s not really a new world with the interest rate strategy the Fed has chosen even considering the current period is unique with historically low unemployment and inflation. Take another look at the chart of the historical Fed Funds rate from 1960 to 2019. Although we’ve seen a decade of persistently low rates, I wouldn’t bet they will continue bottom bouncing over the next decade. An upswing in economic activity and inflation could have a profound impact on pressuring higher rates yet that remains to be seen. I think I speak for all those involved in agriculture that higher inflation in some select commodities would be more than welcomed but the 1980’s can forever keep those interest rates!


Get Updates

Advisory services offered through Plains Advisory LLC, an investment adviser registered with the State of Nebraska. Insurance products and services are offered and sold separately through John Posey, a licensed insurance agent. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

Any information provided is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal, tax, financial or investing advice and cannot be used to avoid tax penalties or to promote, market, or recommend any plan or arrangement. Please note that Plains Advisory LLC does not give legal advice. You are encouraged to consult an attorney.