The United States Federal Reserve's large rate cut of 50 basis points (bps) - the first since 2020 triggered volatility across asset classes. US equities ended lower on Wednesday, as did spot gold in the international market. Asian equities, however, saw meaningful gains Thursday morning, while Indian stocks hit record highs.
Analysts said the trends were on account of Fed chair Jerome Powell beginning the easing cycle with a bumper cut but then saying that the US economy is in good shape. The statement may keep investors cautious for a while.
Analysts said the US is nowhere near a recession but there are signs of an economic slowdown, which will dictate the pace of rate cuts going ahead. "Markets are pricing in around 60 bps (basis points) of easing for 2024 and 150 bps for 2025 - significantly more than the Fed's projections. Most asset classes gave up their gains overnight, as Powell cautioned against expecting larger cuts going ahead," said Emkay Global Financial Services. The US rate cut may shape various asset classes, requiring investors to tweak their portfolios
Impact on equities
Diese Geschichte stammt aus der September 20, 2024-Ausgabe von Business Standard.
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