Earlier this week, the Federal Reserve's July meeting minutes revealed a growing consensus around an interest rate cut, with most officials signaling that if inflation data trends continue as expected, easing could be on the table for the next meeting. And today’s highly anticipated comments from Fed Chair Jerome Powell in Jackson Hole seemed to cement the odds for a September rate cut, which would mark the first reduction since the emergency easing during the early days of the COVID-19 pandemic.
As the Fed gears up for its pivotal rate cut, history suggests that stocks with strong buyback programs could beat the market going forward. Evercore ISI points out that companies with high buyback factors have consistently outperformed during past rate-cut cycles since 1990 "with a 100% hit rate.”
