US Fed Rate Cut
The US Federal Reserve has cut interest rates after a four-year wait. The Fed has cut by 50 basis points. After this the interest rates in the US are between 4.75% to 5%. The decision was taken at the two-day meeting of the Federal Open Market Committee (FOMC).
US Fed Chairman Jerome Powell said after the meeting that the US economy is strong and inflation has come down. 11 out of 12 members of the Fed voted in favor of cutting interest rates.
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Addressing reporters after the FOMC meeting, Jerome Powell said that the US economy is strong. The labor market has returned to normal. The inflation rate has come down to 2.2 percent from 7 percent in August.
He said that now the risk of inflation has also reduced a lot. The Fed last cut interest rates in March 2020. This is a big relief given by the Fed to the public before the presidential election in the United States after a month.
Pressure has increased on RBI
It remains to be seen how much the interest rate cut will be in the domestic market following the Fed’s decision. Fed’s interest rate cut will increase pressure on RBI. In the domestic market, retail and wholesale inflation rates are showing a decline. The result will be seen in the form of a policy rate cut in the MPC due in October.
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It has been in demand in the market for many days. But some experts say the RBI will not be in a hurry and expect interest rates to come down at the MPC in December. After this, interest rates on all types of loans may decrease.
What will affect you?
The Fed’s decision will have an impact on the Indian market. Experts believe that the stock market and gold prices will see a rise. At the same time, the pressure on the dollar is likely to increase. This may strengthen the rupee.
LIVE NOW: Press conference with #FOMC Chair Powell: https://t.co/1uJrua5qsH and https://t.co/FJa6TbkDMt
— Federal Reserve (@federalreserve) September 18, 2024
In such a situation, the decision of the Federal Reserve is seen to have a negative effect on the exporting companies. Companies from pharma to IT sector have to be watched.
Overall, the US Fed’s rate cut is likely to have a positive impact on India’s economy, but it’s important to monitor developments closely as the full implications may unfold over time.
Additional Considerations
• Global Economic Conditions: The impact of the US Fed’s rate cut will also depend on global economic factors, such as trade tensions and geopolitical events.
• Domestic Factors: India’s domestic economic conditions, including fiscal policy, investment trends, and consumer sentiment, will also play a role in determining the overall impact of the rate cut.
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