Wall Street's famous bull: US stocks will rebound for several weeks after the Federal Reserve's interest rate decision in September

According to the financial news app Zhitong Finance, based on the analysis of Tom Lee, the famous Wall Street bull and Head of Research at Fundstrat, the stock market may see a rebound lasting for several weeks after the major interest rate decision by the Federal Reserve on Wednesday. Lee pointed out that the upcoming policy meeting of the Federal Reserve will be held on Tuesday and Wednesday, during which central bank officials will discuss the next interest rate adjustment. The market generally expects the Federal Reserve to cut rates by 25 or 50 basis points, marking the first rate cut in four years. He said, "There are some positive factors at play currently. We know that the Federal Reserve will cut rates. Given that inflation data supports a rate cut, and the labor market also needs some support, I believe this will bring confidence to the market. I think we will see good market performance during and in the weeks following the meeting." Wall Street has been expecting a rate cut for months, especially as the financial environment tightens and the economy shows signs of weakness. Despite strong economic growth, the labor market is steadily slowing down. According to data from the U.S. Bureau of Labor Statistics, the number of new employees in July this year decreased by 3.7% compared to the same period last year. According to the CME FedWatch tool, the market believes there is a 61% probability that the Federal Reserve will cut rates by 50 basis points on Wednesday. However, Lee believes that whether the rate cut is 25 basis points or 50 basis points, as long as central bank officials assure the market of more rate cuts to come, stocks should rise. Lee stated, "A rate cut of 25 or 50 basis points could have hawkish or dovish implications." He explained that if the Federal Reserve makes a significant rate cut, it could raise concerns about an economic recession. "I think the key is whether Chairman Powell can convey the message that this is the beginning of a cycle, and they are confident that we are moving towards a return to neutral rates. Whatever decision they make, it is essentially dovish." Nevertheless, the outlook for an economic recession remains uncertain. Economists at the New York Fed predict that by August next year, the probability of the U.S. economy entering a recession is 62%, slightly higher than last month. He added, "If FOMC members' discussions drag on too long, the market may worry about the risk of an economic hard landing. However, I believe the ultimate outcome will be positive." Lee also predicted that the market performance in 2025 will be strong. After the presidential election, volatility will tend to stabilize, providing another opportunity for the stock market to perform well. Especially against the backdrop of the Federal Reserve's rate cuts, the economic policies of the two presidential candidates also appear constructive. "In the next 12 months, I think investors should be confident," Lee said. "Although there may be some volatility now, the outlook seems quite good."