All the market enthusiasts and investors were anxiously waiting for the meeting of the Federal Reserve Bank. The US Federal Reserve Bank announced its seventh policy decision for 2024 after a two-day Federal Open Market Committee (FOMC) meeting and voted unanimously to slash the benchmark interest. Different speculations and anticipations were made about the rate cut by experts across the world. The Federal Reserve cut its benchmark lending rate by a quarter percentage point in the meeting. This is an extended effort to keep the US economic expansion on a strong footing.

The Federal Open Market Committee lowered its benchmark overnight borrowing rate by a quarter percentage point, or 25 basis points, to a target range of 4.50%-4.75%.

The Federal Reserve concluded its second straight interest rate cut meeting on Thursday, taking a slower approach but still working to adjust monetary policy. The meeting was an awaited event as it was held just after the US Presidential election where Republican Donald Trump made a historic comeback to the White House.

In September meeting, US Fed cut the benchmark interest rate by 50 basis points (0.5%), to a range of 4.75%-5.00%, the first rate cut in four years. Keeping the inflation on track and meet the target level.

What Is Rate Cut By Fed?

The rate cut by Fed is rate sets what banks charge each other for overnight lending but often influences consumer debt instruments such as mortgages, credit cards and auto loans.

What Does This Rate Cut Means For Indian Economy?

Few days ago, different experts an analysts from the nation speculated an impact on Inddian economy due to the Fed rate cut meeting. Most experts thought that the rate cut wont be a major outcome of the meeting, but all the spectators and investors were waiting on Chair Jerome Powell’s comments about the economy and inflation.

Experts traditionally said

“A 25 basis point increase will be a non-event for the market, but overall commentary and outlook will be more important and eventful. If the Fed talks about keeping the rate unchanged for the next meeting, then it would have negative implications,” said Shrikant Chouhan, the head of equity research at Kotak Securities.

“The real impact on market sentiment will likely depend on the Fed’s outlook regarding economic conditions and any hints about the trajectory of future rate cuts. Investors will be looking for clarity on whether the Fed anticipates further easing or if it will adopt a ‘wait and see’ approach, especially as the US economy navigates a complex election year,” said Abhishek Jain, the head of research at Arihant Capital Markets

At the Federal Reserve Bank Meeting-

Yesterday in meeting Fed Chair Jerome Powell’s comment seems like a favorable situation for all the investors. Powell said he was “feeling good” about the economy.

In recent events, the US GDP data shows the economy is strong, and the inflation is easing. However, the Fed is still cautious because of inflation risks and ongoing global tensions.

“Overall, we’re feeling good about economic activity,” he said. “At the same time, we got one inflation report, It wasn’t terrible, but it was a little higher than expected.”

“By December, we’ll have more data, I guess one more employer report, two more inflation reports and lots of other data, and we’ll make a decision as we get to December,” Powell continued.

Federal Reserve Chair Powell said the central bank will watch what happens with the economy and inflation, and adjust policy accordingly.

“If the economy remains strong and inflation is not sustainably moving toward 2%, we can dial back policy restraint more slowly. If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can move more quickly,” Powell said in prepared remarks during the press conference.

“Policy is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate,” he added.

After hearing the statements from Fed Chair Jerome Powell, the flexibility in the policies and his firm stance on the economy are expected to keep things on track. Indian market enthusiasts, Experts and investors can expect positive impact on the Indian market. Everyone will be keeping an eye on the market and hoping for positive outcomes after the meeting.