Suspense Crime Sach Ka Dam
US Fed Meeting: The US Federal Reserve, the US central bank, is currently meeting. This two-day meeting will end today on Wednesday. A decision will be taken on the key interest rate in this meeting. US Fed Governor Jerome Powell will announce this decision tonight. The whole world is eagerly waiting for this decision. Indian stock market investors are also waiting for this decision. Let us know what decision the Fed can take on rate cut today and what impact it will have on the Indian market.
Interest rate may decrease by 0.25%
Experts say that the Federal Reserve can cut its benchmark interest rate by 25 basis points i.e. 0.25%. This will be the third consecutive rate cut. This will reduce the federal funds rate from the current 4.5%-4.75% to 4.25%-4.5%. The market is confident about the rate cut. The Fedwatch tool of the CME Group is showing a 99% probability of a rate cut. The excellent employment figures of December and the inflation figures of last week are supporting the expectations of a reduction in interest rates. After this, the probability of a rate cut in January seems low. The market has only 15% expectation of a rate cut in January.
What will be the impact on the stock market?
The market is expecting a 0.25% rate cut from the current Fed meeting, but more important than that is how many more cuts can happen in the future. Market watchers will keep an eye on how much more is left in the rate cut cycle. The market is expecting three rate cuts in the year 2025, but rating agency Nomura says that only 1 rate cut can happen next year. Nomura said, ‘We hope that Powell will indicate a plan to slow down the pace of rate cuts.’ Rate cuts in America are a positive thing for the Indian stock market. But if there are indications of rate cuts in the future, then the market can see a good rise. Fed’s rate cut cycle can affect FII investment in India. In October and November, FIIs had made a huge withdrawal of Rs 1,16,437 crore from the Indian stock market. After this, FIIs have become buyers in December. So far in December, FIIs have invested Rs 25,702 crore in the Indian stock market.
