Fed Pivot

A Fed Pivot is when the Federal Reserve (the U.S. central bank) shifts its interest rate policy from raising rates to lowering them, or stops tightening monetary policy. You'll hear this term constantly in financial news because it directly affects stock valuations—lower rates make borrowing cheaper and typically boost stock prices. The Fed raises rates to fight inflation and lowers them to stimulate the economy during downturns. Investors obsess over pivot signals because they can trigger major market moves. For example, if the Fed has been raising rates for months but suddenly signals it might start cutting them next quarter, that could spark a rally as traders anticipate easier lending conditions ahead.