Home Depot and Lowe's are already seeing the first of many likely benefits from the Fed's rate cut

Group 1: Federal Reserve Rate Cut Impact - The US Federal Reserve cut rates by half a percentage point, which is expected to have immediate reactions but will take months to fully manifest [1] - Some sectors, particularly home improvement retailers, are already experiencing positive effects from the rate cut, with shares of Home Depot and Lowe's rising [2] Group 2: Home Improvement Retailers' Response - Home Depot and Lowe's are anticipated to see a fundamental recovery as a result of the rate cut, with analysts predicting continued stock price increases [2] - Executives from both companies have noted that their businesses have been constrained by low housing turnover and high borrowing costs due to the Fed's previous tight interest rate policy [2][3] Group 3: Consumer Behavior and Market Dynamics - Home Depot's CFO indicated that consumers are currently in a "deferral mindset," delaying big-ticket home improvement purchases unless necessary [3] - Fed Chairman Jerome Powell mentioned that the housing market is "frozen" due to low rates, but as rates decrease, more people are expected to sell their homes, which could stimulate the market [3][4] Group 4: Future Expectations and Strategies - Powell suggested that further rate cuts may occur if data supports it, potentially encouraging consumers to take out new mortgages or credit lines [4] - Both Home Depot and Lowe's have been managing investor expectations amid slumping sales, while continuing to invest in their stores in anticipation of pent-up demand being released [4][5] - Lowe's management is expecting a "phased recovery," starting with smaller projects before homeowners engage in larger renovations [5]