december 19, 2024
US Fed rate cut: Markets crash, rupee plunges and more
The two-day US Federal Reserve policy meeting ended on Wednesday, December 18, followed by US Fed Chair Jerome Powell’s press conference at 12:30 AM IST on Thursday.
The Fed announced a 25 bps cut in its benchmark interest rate to
4.25% - 4.5%. This was as per market expectations.
However, citing stubborn inflation, the Fed is now planning only two rate cuts in 2025, a sharp decrease from the earlier estimate of four cuts.
Investors were left disappointed with the Fed's decision to slow down the pace of rate cuts, leading to a strong reaction in the domestic and global financial markets.
The NASDAQ 100 slumped by 3.6% and the S&P 500 fell below the 6,000 level after the announcement. This is the worst fall for the S&P 500 index on a US Fed policy decision day since 2001.
The Dow Jones Industrial Average dropped by over 1,100 points during intraday trade on Wednesday, extending losses to the 10th consecutive session, its longest losing streak since 1974.
In domestic markets, SENSEX and NIFTY50 were trading 1% lower at 1 pm on Thursday.
The Indian rupee dropped 12 paise to an all-time low of 85.06 against the US dollar in early trade on Thursday after the hawkish approach taken by the US Fed.
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