Franklin Templeton: The Fed's easing cycle may be an important signal for a strong stock market

ChainCatcher message, the beginning of the Federal Reserve's easing cycle should be seen as an important signal to increase equity exposure.

Chris Galipeau, Senior Market Strategist at Franklin Templeton, stated that history shows when the Federal Reserve cuts rates during an economic expansion, the S&P 500 index averages a 16.66% increase in the 12 months following the first rate cut. Conversely, when the Federal Reserve cuts rates during an economic expansion, the maximum average decline of the S&P 500 index is 4.91%. He noted that since the Federal Reserve cut rates in 1990, large-cap and small-cap stocks have shown the strongest growth performance in the 12 months following the first rate cut. "Therefore, we believe any pullback is a buying opportunity," Galipeau added. (Jin Shi)