By how much will the Fed slash rates by? Here's how the move will matter world markets
Fed rate cut is directly targeted at battling the inflation levels in the United States, and also halt the recession in its tracks, but there is still some more insight needed as to how much the move will affect the markets beyond the US. There are chances that the global markets will resonate the impact of the Fed rate cut, and countries like China, which exports heavily to the United States, could be among the ones most affected by the call.
Will the world markets react negatively towards the Fed rate cut?
The Fed rate cut date could be approaching steadily, and there is not telling how parts of Asia, Africa and even Europe will react to it. The final announcement of a rate cut will mean that recession is finally arriving and thereon, things could drastically change around the US economy. During the pandemic too, inflation hurt the US economy badly, and this time, factors like the US election, unemployment rates and geopolitical situation could create an impact on world trades as well as the US markets after the Fed rate cut.
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How much can the Feds slash rates by?
There is still no confirmation how much the Federal Reserve is willing to forego, but various economists across the world feel that a 25bps rate cut would be enough for the time being to heal the US economy's tracks and delay an impending recession. Meanwhile, others claim that US economy needs a massive 50bps rate cut for now, for an economic soft landing.
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