There was a big news from the US and its impact on the Indian stock market today is evident. In fact, the Federal Reserve has cut interest rates (Policy Rate Cut) after nearly four years. Earlier in March 2020, the US reduced its policy rate. The central bank announced a massive rate cut of 50 basis points, or 0.50%. The immediate impact of this US move was a rise in the US market.
These are the new interest rates in the U.S.
The US central bank announced a half percentage point rate cut after reviewing the policy rate. Since then, the US policy rate has now dropped to the level of 4.75% to 5%. Previously, it was at the level of 5.25% to 5.5% for a long time. Here I would like to tell you that this rate cut is in line with the expectations of market experts. Some experts predicted that the policy rate would be reduced by a quarter, and some experts predicted that it would be reduced by half a percentage point.
Inflation work continues, further cuts possible
The Federal Reserve has started cutting interest rates and has indicated that it will do so again in the coming days. While announcing the rate cut, Fed Chairman Jerome Powell said there was no delay in the rate cut. He further stated that despite the 50 basis point rate cut, the work to combat inflation is not over.
Amid reports of a recession, central bank governor Jerome Powell said the U.S. economy remains strong and we want to keep it that way. U.S. GDP could grow 2% in 2024.
US Market Conditions
The US market rose on the announcement of rate cut. The Nasdaq rose by about 1% and the S&P 500 also rose by 0.50%. However, the Dow Jones Index fell slightly. However, the Indian market also showed signs of prosperity due to the Fed’s confidence that inflation is under control and the prosperity of the global market.
Any financial turmoil in the US has a direct impact on the Indian stock market. Now, with the Fed rate cut and expectations of further rate cuts, the stock market is likely to see some volatility on Thursday. The most affected are expected to be IT companies and banking stocks. Let us tell you that the stock market fell on the last trading day on Wednesday, with the BSE Sensex falling 131 points to close at 82,948.23, while the NSE Nifty fell 41 points to close at 25,377.55.
Gold could shine further thanks to US decision
The impact of this decision of the US central bank is not only reflected in the stock market, but also in the gold price, and signs of this have been found. In fact, after the policy rate was reduced by 0.50%, the Comex gold price has recorded an increase, reaching $2,627.2 per ounce for December 2024.
(Note- Always take advice from market experts before making any investment in the stock market.)
Follow us On Social Media Google News and Twitter/X