US Fed Rate Cut: Impact on Market and Investors' Sentiment

Could a rate cut by US Fed perk up markets? Here's what four leading fund managers say

With the Bank of Japan raising interest rates and causing upheaval in global markets, attention now turns to the US Federal Reserve and its potential rate cuts. Fed Chair Jerome Powell has hinted at a rate cut in September.

• Chirag Mehta, CIO at Quantum Mutual Fund, believes that a rate cut in the September meeting is likely, and markets will react accordingly.
• The impact of rate cuts on markets depends on the reasons behind them. If driven by growth concerns, the current trend may persist; however, if due to low inflation, it could be positive.
• Market jitters from bad US job data, Middle East tensions, and currency fluctuations have led to corrections in overvalued Indian markets.
• Despite global economic challenges, some fund managers are skeptical about the efficacy of a modest rate cut by the US Fed in alleviating investor worries.
• Saahil Kapoor from DSP Mutual Fund underscores that a 25bps cut may not have a significant effect.
• Ashish Gupta, CIO at Axis Mutual Fund, anticipates no rate cuts in the upcoming policy but emphasizes the potential rotations in market sectors post rate cuts.
• Mahendra Kumar Jajoo, CIO at Mirae Asset Investment Managers, highlights the global market volatility and points towards potential rate changes by the Fed to stabilize the situation.

While FPIs have been net sellers recently, market sentiment remains uncertain amidst shifting global economic scenarios.

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Conclusion:

As uncertainty looms over global markets, the potential rate cut by the US Fed remains a focal point for investors. Fund managers express varied opinions on the effectiveness of rate cuts and the impact on market dynamics and investor sentiment.

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US Fed rate cut, fund managers, market impact, investor sentiment