Understanding the Mechanism: How Rate Cuts Impact Markets. Investing when rates decrease. By: Stephan Warren As the Federal Reserve shifts from a restrictive to an accommodative monetary policy by lowering interest rates, a fundamental change in the economic landscape occurs, presenting both opportunities and risks for investors. This action is typically a response to a … Continue reading UNDERSTANDING THE MECHANISM: HOW RATE CUTS IMPACT MARKETS. INVESTING WHEN RATES DECREASE.