US cuts interest rates as Trump election raises uncertainty

Published On Nov 7, 2024, 2:00 PM

The US central bank has lowered its key interest rate to 4.5%-4.75% amidst uncertainties following Donald Trump's election win. This marks the second consecutive rate cut, following a previous reduction in September, suggesting a cautious optimism about inflation stabilizing. However, Trump's economic policies could affect inflation and government borrowing, causing mixed sentiment regarding future rate cuts. Interest rates have recently been high due to past hikes in response to inflation, but recent data shows an easing in price rises.

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Stock Forecasts

SPYView SPY chart on TradingView

Positive

The interest rate cut is generally positive for the stock market as it makes borrowing cheaper, potentially boosting consumer spending and corporate investment.

BNDView BND chart on TradingView

Negative

Investors might be concerned about potential inflation pressures from Trump's tax cut and tariff policies, leading to higher borrowing costs in the future, which could negatively affect the bond market.

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