Buy Hold Sell: 5 interest rate sensitive stocks for a new world of lower rates

With the US Federal Reserve cutting its cash rate by 50 basis points in September, Fitch Ratings predicts that the upper US federal funds target will fall to 4.5% by the end of the year, 3.5% by the end of 2025, and 3.0% by June 2026.  

Meanwhile, JP Morgan expects the Fed will cut by another 50 basis points in November. Looking out over the next few years, JP Morgan notes the Fed’s “dot plot” has four more 25 bp cuts (totalling 100 bp) in 2025. It also notes that the Fed has increased projections for its neutral funds rate by another eighth of a percentage point to 2.875% — which it expects to reach in 2026.

No one has a working crystal ball, but if expectations are anything to go by, interest rates (in the US at least) are on their way south. And while we may never see 0% cash rates again, lower cash rates are still positive for equities. 

So, in this episode, Livewire's Ally Selby was joined by Magellan's Arvid Streimann and Antipodes' Jacob Mitchell for their analysis of three interest-rate sensitive stocks that could benefit from this lower rate environment. 

Plus, they name two big buys that they are betting on today with this in mind. 

Note: This episode was recorded on Wednesday 23 October 2024. You can read an edited transcript below. 

https://www.livewiremarkets.com/wires/buy-hold-sell-5-interest-rate-sensitive-stocks-for-a-new-world-of-lower-rates/