Fed Pivot

A Fed Pivot is when the Federal Reserve (the U.S. central bank) shifts its interest rate policy from raising rates to cutting them, or signals it will soon. You'll hear this term constantly in financial news because it directly affects stock prices—lower rates make borrowing cheaper, which typically boosts company profits and investor appetite for stocks. Conversely, rate hikes can slow economic growth and hurt stock valuations. For example, if the Fed has been raising rates to fight inflation but then signals it's done and will start lowering rates next quarter, that's a pivot. Retail investors watch for pivot signals because they can trigger big market moves.