Jerome Powell cuts rates on Wednesday and it was music to the stock market and borrower’s everywhere ears.

The Federal Reserve cut its benchmark interest rate 25 basis points (bps) yesterday, bringing the federal funds rate target range to 3.50% to 3.75%. Jerome Powell suggested a higher bar for future cuts, indicating a potential pause. The move signals the Fed is assessing how the economy evolves amidst conflicting data and a divided committee.

📈 Impact on Financial Markets

• Stock Market (Equities): The stock market, particularly the #DowJones, #Nasdaq, and S&P 500, reacted positively, as lower interest rates reduce borrowing costs for companies, especially tech companies, which can boosts profitability and make stocks more attractive relative to bonds.

• Bond Market: #BondMarket prices and interest rates have an inverse relationship. Therefore, a rate cut typically causes bond prices to rise and their yields to fall. This makes existing bonds more valuable. ✂️✂️✂️