Morning Market Quote : The big Fed rate cut by 50 bp has the potential to take equity markets into a consolidation phase with an upward bias Says Dr. V K Vijayakumar, Geojit Financial Services

2024-09-19 09:14:39 am | Source: Geojit Financial Services Ltd

Morning Market Quote : The big Fed rate cut by 50 bp has the potential to take equity markets into a consolidation phase with an upward bias Says Dr. V K Vijayakumar, Geojit Financial Services

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Below the Quote on Morning Market from Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services

"The big Fed rate cut by 50 bp has the potential to take equity markets into a consolidation phase with an upward bias. The Fed chief Powell’s remark that “we have gained greater confidence that inflation is moving sustainably towards 2%” is a very optimistic commentary of the US economy. At the same time US growth continues to be solid and the labour market is good.

More rate cuts are expected from the Fed, going forward. The rate projections are 4.4% by end 2024 and 3.4% for end 2025. These will be big declines from the present 4.75 to 5% rate.

The rate cuts by the Fed will pave the way for rate cuts in India, too. CPI inflation coming below the RBI’s target of 4% during the last 2 months will facilitate rate cuts. Two rate cuts of 25bp each are possible in India before March 2025. In brief the market scenario is turning favourable for rate-sensitives, particularly banking."

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