Wall Street Lunch: Fed Rallies Round J-Pow For 'Risk-Management' Cut

Group 1 - The Federal Reserve cut interest rates by 25 basis points to a range of 4%-4.25%, marking the first rate cut of the year [2][3] - The decision saw 11 out of 12 FOMC members in favor, with dissent from Stephen Miran who advocated for a 50 basis point cut [3] - The Fed acknowledged risks in the labor market, indicating a slowdown in job gains and a slight increase in the unemployment rate, while inflation remains elevated [4] Group 2 - The Summary of Economic Projections indicated a median forecast for two additional quarter-point cuts this year, with a close margin of 10-9 [4] - The projections also showed expectations for higher GDP and core PCE inflation for the next year compared to previous forecasts, alongside a lower unemployment rate [5] - Fed Chairman Powell described the rate cut as a "risk-management cut," suggesting a cautious approach moving forward [6] Group 3 - Market reactions included a selloff in stocks and bonds following Powell's press conference, with the S&P 500 ending down 0.1% and the Nasdaq Composite down 0.3% [8] - The 10-year Treasury yield briefly fell below 4% but ended at 4.07%, while the 2-year yield rose to 3.55% [9] - Following the rate cut, a strategist identified six stocks as potential buys, including Alexander & Baldwin, Heritage Insurance, and Merck [9]