Analysis-Fed rate cuts could set stage for broader US stock gains

By Lewis Krauskopf

NEW YORK (Reuters) -The resumption of monetary easing by the U.S. central bank could add to and broaden Wall Street’s rally, investors say, though such a boost might already be priced in and could depend on whether lower interest rates help the economy avoid a significant downturn.

The Federal Reserve is widely expected to reduce its benchmark rate for the first time since December at the end of its two-day monetary policy meeting on Wednesday, in an effort to shore up a weakening labor market. The move is expected to kick off a series of reductions, with nearly six standard quarter-point cuts priced into markets by the end of next year.

STOCK GAINS TEND TO FOLLOW RATE CUTS, WITH EXCEPTIONS

Historically, the start of an easing cycle has led to stock gains over the ne