[One Picture Explained] How to profit from 'Fed rate cuts' with ETFs

At 2:00 AM Beijing time on September 19, the Federal Reserve is about to announce its interest rate decision and economic outlook! The market generally believes that the Fed will officially start the interest rate cut cycle at this meeting.

According to brokerage analysis, after the Fed starts the interest rate cut cycle, it will have a significant impact on the global financial and economic sectors:

• From a financial perspective, the decline in U.S. Treasury yields will lead to a decrease in the discount rate for company valuations, which means company valuations may increase;
• From an economic perspective, the reduction in financing costs for businesses and individuals will stimulate U.S. consumption and investment, driving up corporate profit expectations;

The combined effect of these two aspects may push U.S. stocks and global stock markets higher. Considering the positive signals brought by the rate cuts, how can investors choose suitable assets among numerous investment options? Historical data suggests that investing in these assets through ETFs is a good choice.

The figure below details the causal relationship between the Fed's rate cuts and their impact on the financial and economic systems, as well as relevant ETF information, to help investors make decisions:

Want to learn more about the ETFs mentioned in the figure? Immediately @PortAI (click the PortAI icon in the lower right corner of the [Watchlist - Stock Drawer] page to activate PortAI) to learn about the issuing companies, tracked indices, latest performance, and suitability for investors: