The Fed lowered interest rates by 25 basis points, its second rate cut.
Despite two weeks filled with earnings, economic reports, and the U.S. elections, the Fed meeting did not add unnecessary uncertainty to the mix. Instead, Powell and company reminded investors of the strong economic foundation on which the United States continues to rely.
It is no surprise that Chairman Powell did everything possible to deflect questions and political speculation, reaffirming that the Fed is apolitical, as it should be. Investors should continue to trust in Powell's tenure as chairman of the Fed, given the progress that the committee has made on inflation without sacrificing the U.S. economy.
Powell did not comment on the possibility of the Fed cutting rates in December, which should not surprise investors. However, the Fed seems more comfortable with the labor market and the current U.S. economic context than it did a few months ago.
While many Americans may still be immersed in the emotions of the U.S. elections, it is time for investors to focus on the most significant drivers for the stock market, which include earnings, the economy, and Fed policy. At this moment, all three are moving in the right direction.
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