The Federal Reserve's year-end decision to cut interest rates by 25 basis points (0.25%), the third rate trim of 2025, marked a bid to further stimulate borrowing and investment amid a complex and shifting economic environment. While some of the usual impacts of a rate cut have yet to materialize—10-year Treasury yields have so far stayed unusually high, for example—other corners of the market should provide more predictable opportunities for investors.
If the thought of targeting individual assets with the potential to benefit from a lower federal funds rate seems too risky given broader uncertainties, consider an exchange-traded fund (ETF) that could be well-positioned to thrive in this environment. A number of funds, including dividend stocks, real estate sector securities, and corporate bonds, could see success heading into the new year.
