Historically, markets have encountered trouble whenever rate cuts occurred. The period from 2015 to 2019 was the only instance in the last 30 years when markets rose during rate cuts. It may not happen immediately but we might see the effects 3-4 months down the line possibly after the U.S. elections. We are likely to experience either a price or time correction, which is due anyway.
As a layman, what does it actually mean? Is it a good sign for the economy? Or bad?
Technically, it should be a good sign because more money could be poured into the economy. However it is usually more nuanced than this and the right pace for rate cuts is also needed among other factors for the economy to flourish. This is a huge topic and I'm no economist so I wouldn't want to guarantee anything. I'm glad they're finally addressing the awful job market and hurting economy.
Understood. Thanks
Recession is closeby
What makes you say that? We technically might get a recession but that will just be because of lagging data. Economic conditions are just going to improve, especially the shitty job market.
The fed cut a similar amount to respond to the housing crisis back in 2007. They are just doing things which they can foresee.
https://share.gvine.app/7Rrcx17kUddJ3ZAg6
We made a post about this, for anybody who wants more context :)
Good post!
Even grapevine doesn't pay to interns. Grapevine has a lot of posts about unpaid interns