This September 17, 2025, the Fed may be making its third occasion since 1996 to cut rates when the S&P 500 is already trading at record highs.

Since 1980, every time the Fed has trimmed rates with the S&P 500 within about ~1-2% of its all-time high, markets have generally responded well.

Historically, when the S&P is already at record highs and the Fed cuts rates, those cuts have been followed by the S&P reaching new highs within the next 12 months.

We are entering these potential rate cuts amid what some consider today’s “AI Revolution,” possibly as large a tech/structural wave as the 1990s.

In 1996, the rate cut (with the S&P near its highs) was followed by a return of approximately +20-25% over the next 12 months.

The upcoming Fed cut (as of mid-September 2025) may be the first in over 30 years during which PCE inflation is this high (≈2.9% core) at the time the Fed is cutting.