There is a 100% chance of at least a 25 bps rate cut in September and a 30% chance of a 50 bps cut. —@
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US Rate Cut in September 2024 is a 'known' information.
The 'unknown' is how will stock market react to the interest rate cut. The answer is in the US economy recession after the US rate cut.
Historically, stock market has always gone up when there is no recession after the US rate cut. With recession, the stock market rally is 50:50 play.
If we combine both recession and non recession period then there is more than 75% probability that equity markets continue to do well after the US rate cut.
No reason for investors to cut equity exposure and become bearish at this level if time horizon is 5 years plus.
@jindalmukesh1
July FOMC Meeting Recap:
Inflation is slowly being tamed and the Fed did not cut interest rates today, however, certain statements Powell made indicated a September rate cut.
Powell insists that the Federal Reserve will not make decisions based on the upcoming 2024 Presidential Election.
Powell emphasized the need for more data before reducing rates. Inflation progress and balanced labor market trends are key.
The markets reacts bullishly to Powell's words and the sentiment from the FOMC meeting.
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