Are rate cuts a sign that the economy is in trouble?

Chief Investment Officer, Steven Latham, CFA, CFP, explains when the Federal Reserve cuts interest rates, they're adjusting the overnight rate that banks and businesses charge each other.

Typically, rate cuts are a way to stimulate the economy, which could imply that the Fed is anticipating economic challenges ahead.

In recent years, the Federal Reserve has kept rates higher than usual to combat inflation.

Now that inflation has cooled, the Fed is shifting focus to the second part of its dual mandate: stable employment.

We've started to see non-farm payrolls slowing down and unemployment ticking up over the last few months.

The Fed, in response, may begin lowering interest rates in the near future in an effort to prevent a further slowdown in employment growth.

Learn more from our recent market update: www.bernicke.com/can-fed-rate-cuts-prevent-job-los…

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