Equity markets performed well in September on the heels of the Federal Reserve decision to cut interest rates by a quarter point. Although the rate decision was widely anticipated, investors seemed to take to heart the old Wall Street saying “Don’t fight the Fed” during the month. With the Fed now embracing a rate cutting stance, equity markets are responding favorably to the prospect of increased liquidity and reduced borrowing costs. The challenge that investors face, however, is weighing the benefits of lower interest rates versus current equity market valuations which appear elevated relative to historical levels. Equity markets also reflect concentration in large cap technology related companies tied to artificial intelligence which could set the stage for an eventual broadening in market participation or rotation into equity laggards and/or those firms well positioned to benefit from expected lower interest rates. Against this uncertain framework, Fed Chair Powell provided his own view of equity market valuations during a speech mid-month saying that: “…equity prices are fairly highly valued.”