Fed Rate Cuts Spark Interest in Home Depot as Housing Market Bellwether

Home Depot (HD -0.68%), a bellwether for consumer spending and the housing market, faces sluggish growth with fiscal 2025 same-store sales projected at just 1%. Yet Jerome Powell's Federal Reserve has cut interest rates by 0.25%, citing labor market weakness and persistent inflation. This monetary easing could reignite discretionary spending—particularly in home improvement—as lower borrowing costs free up capital for mortgages and renovations.

While AI-driven rallies dominate equity markets, underlying economic fragility persists: U.S. GDP growth is forecast at 1.6% for 2025, remaining below 2% through 2028. Home Depot's dividend appeal hinges on whether rate cuts catalyze the housing recovery many anticipate. The stock’s trajectory now mirrors broader debates about consumer resilience amid shifting monetary policy.