I am a little confused. The rate was cut but the market dropped 300 points at the time of this post.. What ? what? I thought this was supposed to be good news.
The Fed cuts rates when they expect an economic slowdown.
I am a little confused. The rate was cut but the market dropped 300 points at the time of this post.. What ? what? I thought this was supposed to be good news.
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It wasn’t the rate cut that caused the drop.
Jerome gave the impression in his first press conference that he was clueless and that the Fed wouldn’t do any more rate cuts.
There is a phrase used by investors.
“Buy on the tumor, sell on the news”
The markets ran up in anticipation of the rate cut and when it materialized traders took some profits. This happens all the time and it was a small move of just over 1%