Interest rate cuts can affect markets in unexpected ways. To keep my portfolio stable, I’m considering the best shares to buy to prepare for volatility
After the US cut interest rates by 50bps last week, all eyes are on the Bank of England (BoE). In August, it made the first rate cut of the year, at 25bps. Brokers and financial institutions expect at least one more rate cut this November, taking it down to 4.75%, with four more cuts down to 3.75% throughout 2025.
The US’s leading tech index, the Nasdaq (^IXIC), is up 1.8% since the Fed’s big cut last week. By comparison, the FTSE All-Share (^FTAS) is down 0.6% since the BoE cut on 1 August. So does the UK index need that extra 0.25 percentage drop before a recovery kicks in – or could another rate cut cause further declines?
To prepare for either scenario, I’m considering the following two shares.
A defensive dividend stock
Certain stocks tend to…
