The Fed's 50 basis point interest rate cut sparked market rally, but long-term impact uncertain.

From Investing.com: 2024-09-22 05:30:00

The Federal Reserve’s 50 basis point interest rate cut has caused a market rally, but questions linger about its long-term impact beyond current upticks and potential future cuts.

The anticipated rate cut on Sept. 19 led to new market highs followed by a slight dip, leaving markets in a generally positive state as traders await upcoming economic data.

Cyclical sectors are predicted to outperform in the short term, with sectors like technology potentially lagging.

The Fed’s decision will shape future economic outcomes, with confident predictions of continued stock market growth or looming risks if the rate cuts prove too late to prevent a downturn.

If the Fed’s actions were delayed, the S&P 500 could plummet by over 30%, echoing corrections seen in previous economic downturns like in 2000 and 2007.

Future economic data releases will be crucial in assessing the effectiveness of the Fed’s actions in steering the economy away from a recession or facing further challenges ahead.



Read more at Investing.com: What the Fed decision means for markets, beyond the near term By Investing.com