Business News Desk – If the US central bank Federal Reserve cuts interest rates by 0.50 percent, what will be its effect on the Indian stock market? Experts say that if this happens, the market may bounce back rapidly. But a message will also go out that a big cut in interest rates is raising concerns about the economy.
Will a strong dollar provide relief? Experts say that for economies that were hoping that a cut in US interest rates would weaken the strong dollar and boost their currencies, this is unlikely to happen.
In the last four decisions when interest rates were cut, the dollar strengthened three times after the first reduction by the Fed, JPMorgan reported.
The dollar’s movement will depend on where US rates stand compared to other countries. Big action will be seen in the market on Thursday after the Fed’s decision. If we look at polls around the world, 60 percent of people believe that interest rates can be cut by 0.25 percent. If there is a cut, it will be the Federal Reserve’s first decision regarding the cut after March 2020. The Federal Reserve had cut interest rates to support the US economy during Covid.
