The Fed's Rate Cut Expectations Cause Stock Market Volatility
At 3 a.m. on November 28, the Federal Reserve officially released the minutes from the November meeting, clearly indicating that a rate cut in December is highly likely, with an expected reduction of 25 basis points.
Upon the release of this news, the financial markets were instantly thrown into turmoil, and many market traders immediately adjusted their expectations. According to current market estimates, the probability of a 25 basis point rate cut next month has surged to 59.6%.
From the perspective of the stock market, the expectation of a rate cut is an extremely crucial positive factor. For the A-share market, this expectation is likely to encourage more inflow of foreign capital; the U.S. stock market will see a significant reduction in financing costs, thereby providing strong support for stock prices.
However, we must be fully aware that the Fed's rate cut reflects the slowing growth of the U.S. economy and various potential concerns such as inflation. These hidden adverse factors will undoubtedly add a significant amount of uncertainty and risk to the subsequent trends of the stock market.