A bull market on borrowed time

While the US enjoys a bull market, it may not last. Will the US rate cut push stock prices down?

A hand holding a pen points to a bright stock market chart on a digital screen with fluctuating green and red graph lines indicating financial data
(Image credit: Andrew Brookes)

Has the US Federal Reserve made a mistake? America’s central bank slashed interest rates by 0.5 percentage points last month, an unusually dramatic move designed to pre-empt an economic slowdown. But recent data suggests that cut may have just poured fuel on to the fire. Investors have been treated to a “string of hot data” from the world’s biggest economy, says Matthew Fox for Business Insider. Jobs growth is strong and retail sales “solid”.

The Atlanta Fed estimates that US GDP grew at an annual pace of 3.4% in the third quarter, hardly the sign of a stalling economy. That is prompting a rethink about how fast the Fed will cut rates. The US 10-year Treasury yield, which reflects expectations about future rates, has risen from 3.6% in September to 4.2% now. “The Fed was too dovish when it cut,” says a note from Yardeni Research. Overly easy monetary policy is “raising the odds of a stock market melt-up”.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.