World braces for Fed easing amid 36-hour rate rollercoaster
The world economyβs tectonic plates will shift this week when a US easing cycle begins, just as officials from Europe to Asia set policy against a backdrop of brittle markets. A 36-hour monetary rollercoaster will start with the Federal Reserveβs probable decision to cut interest rates on Wednesday, and finish on Friday with the outcome…
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Fed factor: Rate cut theory suggests higher equity valuations, but history tells a different story
The Nifty Index experienced negative returns twice and remained nearly flat on one occasion following the last three Federal Reserve rate cut cycles. This suggests a contrarian trend in the index compared to the conventional theory that predicts a boost in equity valuations from lower interest rates. Following the 2001 rate cuts, the Nifty fell…
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Stocks drop, Nasdaq confirms correction as recession fears mount
U.S. stocks sold off for a second straight session on Friday, and the Nasdaq Composite confirmed it was in correction territory after a soft jobs report stoked fears of an oncoming recession. The Labor Department said nonfarm payrolls increased by 114,000 jobs last month, well short of the 175,000 average forecast by economists polled by…
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If Fed starts cutting rates from September, will it have a multiplier effect on stock markets?
Notwithstanding the 17% surge seen in Sensex and Nifty so far in the calendar year, Fed’s expected rate cut in September can still have a multiplier effect on the stock market. The Fed move of holding rates steady on Wednesday night and strong hints of a first cut in September unleashed animal spirits in global…
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