Fed Meeting News: Global Markets Await Interest Rate Decision

Impact of Fed's Interest Rate Decision on Global and Stock Market

As the US Federal Reserve prepares to announce its latest interest rate decision on September 18, 2024, global markets are holding their breath. The two-day Federal Open Market Committee (FOMC) meeting has investors and traders anticipating a rate cut for the first time since 2020. Fed Chair Jerome Powell is expected to announce the decision at 2 PM ET, with speculation growing around whether the cut will be 25 or 50 basis points. This decision could have wide-reaching implications for both the US and global markets.

In addition to the interest rate announcement, the FOMC meeting results will also include projections for future rate changes, often referred to as "dot plots." These projections will give investors a clearer view of the Fed's policy trajectory for the remainder of the year. Powell will also hold a press conference following the announcement to provide further insights into the Fed’s decision-making process, which is increasingly focused on labor market data rather than just inflation.

Impact of Fed Meeting on Global Markets and Stocks

The Fed meeting news has already caused ripples across global markets. Indian tech stocks, including Tech Mahindra, Infosys, and TCS, have all experienced declines as investors brace for the outcome of the FOMC decision. A significant interest rate cut could lead to a weakened US dollar, benefiting exporters but hurting importers.

Meanwhile, US stock markets have shown muted activity ahead of the Fed meeting results. The S&P 500 has risen in the past week, but many believe stocks could see increased volatility once the FOMC meeting concludes. Investors are also paying attention to global central banks, with the Bank of Japan and Bank of England holding their monetary policy meetings later this week.

Moreover, the crypto market reacted positively to the Fed Meeting decisions. The majority of the coins including Bitcoin and Ethereum headed bullish signs.

At the press time, BTC price was hovering at $60,177.56, after a 2.61% surge in 24 hours with $1,190,319,037,932 in market cap. Ethereum price was trading at $2,322.51 with $279,470,156,508 in market cap.       

FOMC Decision: Will the Fed Cut by 25 or 50 Basis Points?

At the heart of the discussion is the question of how much the Fed will cut interest rates. While many expect a 25 basis point cut, there is a growing belief that a 50 basis point cut could be on the table. According to the CME FedWatch Tool, there is a 65% chance of a 50 basis point cut. The outcome of the Fed meeting today live will have a significant impact on market dynamics, influencing everything from stock prices to the value of the US dollar.

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