FOMC (Federal Open Market Committee) rate cut can often lead to higher stock prices. When the Fed lowers interest rates, borrowing costs decrease, making it cheaper for businesses and consumers to take out loans. This can stimulate economic activity and boost corporate profits, which in turn can drive stock prices higher.
Additionally, lower interest rates can make bonds and other fixed-income investments less attractive compared to stocks, leading investors to shift their money into the stock market. This increased demand can push stock prices up.
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- AlvinBell·11-06Smart decisionLikeReport