How the fed rate cut could impact Indian stock markets

Marking the beginning of a new phase of rate cut cycle after 4 years in global markets, the US Federal Reserve is all set to lower interest rates from the current 23-year high of between 5.25 and 5.50%. As far as the reaction of the stock market is concerned, it all depends on whether Jerome Powell goes for a 25 bps cut or 50 bps cut and why. About two-thirds of traders on Wall Street are pricing in the chances of a 50 bps cut on Wednesday and a total of 100 bps rate reduction by the end of December 2024. But the market has a history of being wrong when it comes to predicting the mood of the rate-setting panel Federal Open Market Committee (FOMC).