Powell Says “Maybe” We Cut Next, Your Game Plan When the Fed Gets Flirty

TJX Companies (TJX)

Off-price thrives when shoppers trade down without trading joy. TJX hunts for branded overstock and passes the win through the racks, which is exactly what people want in a meh-growth, still-pricey world. 

If rates drift lower and confidence steadies, traffic stays sturdy; if growth wobbles, value gets even more popular. The sourcing engine is a quiet superpower, lots of small buys, constant refresh, fast sell-through, which keeps inventory risk low and margins healthy. Add e-commerce that funnels you to stores (treasure-hunt energy) and international white space, and you get a model that compounds without needing a perfect macro. 

Risks are a sudden full-price comeback or supply dislocations as both tend to be temporary. The punchline is steady comps, disciplined buys, and everyday value that works whether the Fed winks or waits.

McDonald’s (MCD)

When budgets feel tight, golden arches glow brighter. MCD’s edge is the trifecta: value, convenience, consistency. Digital ordering, app deals, and delivery make the check easy, and the franchise model keeps capital needs and volatility lower at the corporate level. 

Pricing power helps blunt food-cost noise, and simplified menus plus equipment upgrades keep service snappy. If the labor market cools, trade-down from casual dining flows here; if growth holds, breakfast, snacks, and limited-time offers keep traffic humming. 

International exposure adds ballast, and refranchising means more royalty-like cash flow. The setup into an uncertain cut path, with high free cash flow, shareholder returns, and demand that’s more about habit than headlines. Watch input costs and overseas currency, but the brand usually wins those rounds on time.

Visa (V)

Own the rails, not the riders. Visa takes a thin slice of the world’s spend, with no credit risk on its own balance sheet. If the Fed keeps easing, cross-border travel and discretionary categories tend to perk up, if they pause, the secular drumbeat from cash-to-card, tap-to-pay, and embedded checkout keeps the network compounding anyway. 

The moat is two-sided scale: merchants want the buyers, issuers want the acceptance, and fraud tools keep both sticky. Tariff noise and inflation shifts don’t change the core math of nominal spending with mix uplift (travel/services) and new flows (B2B, bill pay, real-time payout partnerships) leading to durable growth. 

Yes, take rates can wiggle and regulators will occasionally grumble, but the platform’s utility is hard to replace. In a maybe we cut world, Visa only needs swipe, dip, and tap.

American Water Works (AWK)

Boring on purpose, and that’s the charm. AWK delivers regulated water and wastewater service, with allowed returns that are set in rate cases rather than by market vibes. That means visibility, inflation pass-through mechanisms, and capex that actually earns. 

If the Fed slows the cadence of cuts, AWK isn’t derailed, and if cuts continue, financing a long pipeline of system replacements and resiliency projects gets cheaper at the margin. Population growth corridors, stricter quality rules, and aging pipes are secular tailwinds, because people don’t skip showers in a downturn. 

The company’s playbook of disciplined acquisitions of small municipal systems, operational upgrades, and prudent leverage has produced steady EPS and dividend growth for years. Risks include weather swings and regulatory lag, but the asset class generally carries you gently through choppy macro. It’s the sleep-tight sleeve that lets you own more cyclical names elsewhere.