Insights

In Q3, most asset classes, including stocks and bonds, saw strong gains, driven by expectations of lower interest rates and diminishing recession risks. Notable trends included a rebound in small-cap stocks, a boost for international markets due to a weaker dollar, and the best quarter for bonds this year. Meanwhile, commodities lagged due to declining oil prices.

The Federal Reserve is set to begin a rate cutting cycle on September 18th. An initial 0.25%-0.50% cut is expected, the first of several over the next year as their attention moves from inflation to a slowdown in employment growth.