So we finally got a rate cut — and a supersized one at that. After the move was announced Wednesday, Federal Reserve Chair Jerome Powell said officials made that decision to keep the US economy in its current “good shape.” Will that pan out? Only time will tell, of course, but recent history doesn’t make it look like it’s a sure shot by any means.

A handful of Federal Reserve officials on Monday left open the door to additional large interest-rate cuts, noting that current rates still weigh heavily on the US economy.

Money market funds are hesitant to buy longer-term Treasury bills even though the Federal Reserve cut interest rates by a half percentage point last week.

Federal Reserve Chair Jerome Powell is known for providing clear signals about the central bank’s next interest rate move in order to avoid roiling markets. But Wall Street was mostly clueless this week when it came to predicting how big a rate cut the Fed would deliver on Wednesday.

The reaction to the rate cut has been positive across the soft landing checklist. Odds of avoiding recession are higher following Chair Powell's aggressive start.

The Fed's interest rate cuts should continue to fuel the stock market as long as the economy avoids recession, experts say. But stocks are overvalued.

It’s just not realistic to wait until problems show up,” he said. “If we want a soft landing, we can’t be behind the curve.”

Key Takeaways Since the 1970s, the performance of the S&P 500 has been slightly below average in the 12 months after the first rate cut of a monetary-policy easing cycle.When looking only at rate cuts that have coincided with soft landings,

Federal Reserve Bank of Chicago President Austan Goolsbee on Monday said he expects "many more rate cuts over the next year" as the U.S. central bank seeks a soft landing for the economy, where it controls inflation without crashing the labor market.

Investors are cheering as policymakers expect the labor market to hold steady through a series of smaller cuts into 2025.