Our Urgent Market Update Video reviews important real-time market developments and their impact on high-probability trading opportunities. Today, we discuss the big rate cut from a dovish FED but also discuss how markets will react over the short to medium term.
Last night the FOMC decided to cut rates by 50 basis points from 5.5% to 5%. They decided on this large cut upfront to almost ensure a soft landing, maintaining lower pressures on inflation along with keeping unemployment numbers under control. If the markets believe this to be true, which is the case for now, then we will see significant further upside in the Indices markets along with a weaker USD purely because the act of lowering rates loosens financial conditions which is very good news for medium and small cap corporates, the US Government and individual households especially when it comes to refinancing debt.
Although, J Powell Fed Chair stressed that the Fed will not pre-commit to further rate cuts, his actions and FED dot plot suggest otherwise. As a result, we expect markets to broadly act in a significantly risk-on/bullish manner until some of the major market data points like inflation, unemployment and growth figures suggest otherwise.
We hope this analysis helps you position yourself in the right markets in the right direction!
Big Rate Cut From a Dovish Fed but How Will Markets React? – Full Video Analysis
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