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Asset Performance During Fed Rate-Cutting Cycles

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Asset Performance During Fed Rate-Cutting Cycles

Asset Performance During Fed Rate-Cutting Cycles

Westwood
Historical analysis of asset class returns across major Fed easing cycles (1984–2024)  |  February 2026  |  For Informational Purposes Only
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The Fed initiated its current easing cycle in September 2024, cutting rates by 100 bps through December 2024 before pausing. With rate cuts resuming in September 2025, this analysis examines how asset classes have historically performed during the six major rate-cutting cycles since 1984.
Source: Westwood analysis based on publicly available historical market data. Fed rate-cutting cycles defined as: 1984–86 (Volcker easing), 1989–92 (Gulf War recession), 1995–96 (insurance cuts/soft landing), 2001–03 (dot-com/9-11), 2007–08 (financial crisis), 2019–20 (COVID pandemic). Asset proxies: Small Cap = Russell 2000 Index; Large Cap = S&P 500 Index; International = MSCI EAFE Index; Gold = spot gold price; Emerging Markets = MSCI Emerging Markets Index; High Yield = ICE BofA US High Yield Index. Returns shown are total returns where available. 12-month forward returns measured from date of first rate cut in each cycle. All indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. The information provided is for educational purposes only and should not be considered investment advice. Westwood Holdings Group, Inc.
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The information contained herein represents the views of Westwood Holdings Group, Inc. at a specific point in time and is based on information believed to be reliable. No representation or warranty is made concerning the accuracy or completeness of any data compiled herein. Any statements non-factual in nature constitute only current opinion, which is subject to change. Any statements concerning financial market trends are based on current market conditions, which will fluctuate. Past performance is not indicative of future results. All information provided herein is for informational purposes only and is not intended to be, and should not be interpreted as, an offer, solicitation, or recommendation to buy or sell or otherwise invest in any of the securities/sectors/countries that may be mentioned.

The information provided is for informational purposes only and should not be construed as investment advice. The examples provided do not represent an endorsement of any company, product, or strategy by Westwood Group or its affiliates.