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"Earlier in the month, market predictions showed a 35% chance of a 50bps rate cut, compared to a 65% likelihood of a smaller 25bps reduction. However, weaker-than-expected US jobs data suggesting slower pace of hiring, and a lower inflation report for August 2024, signaled a more significant economic slowdown than anticipated. These developments shifted expectations, with the probability of a 50bps rate cut rising to 65%. On September 18th, the Federal Reserve followed through with this aggressive cut.

In the Indian market, NIFTY has climbed 2.1% over the past 10 days in anticipation of the rate cut, although market activity remained relatively flat today, with early excitement tapering off by the afternoon.

This suggests that markets may have already priced in the rate cut and are looking ahead to other clues. Additionally, crude oil prices are trading at 52-week lows, and essential metals like iron ore and steel are hovering near multi-year lows—clear indicators of a slowing global economy.

Looking forward, markets may shift their focus to how these rate cuts affect corporate earnings and broader economic health, especially if global demand continues to weaken."