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If the Fed really cuts interest rates by 50 basis points, the US stock market may go haywire.
On September 18th, Jin10 Data reported that the Fluctuation caused by the debate surrounding a 25 basis point or 50 basis point rate cut may be what the S&P 500 needs to close at a new high. Jim Reid of Deutsche Bank presented some convincing facts about the prosperity of the US stock market, supporting the view of the bank's economists that the Fed will implement a smaller rate cut today. Given that the market has set a record for betting on a 50 basis point rate cut, this decision will trigger a large Fluctuation. Looking back at the Fed's rate cut cycles since 1957, the S&P 500 index was the strongest in the year before this cycle began. Therefore, it is unusual to relax monetary policy against such a strong stock market background. Therefore, when the Fed cuts rates today, it will enter a loose cycle in at least the most prosperous stock market in 67 years. In fact, yesterday was the seventh consecutive day of pump in the stock market, and the S&P 500 index also hit a new high in intraday trading. If the Fed had cut rates by 50 basis points from the beginning, given the background of the first time in nearly 70 years, this move would be even more dramatic.