Can you reduce the interest rate by 3 times?
The Fed announced a rate cut of 0.25% this morning, which was another three consecutive meetings to cut interest rates for more than 20 years. The market has been psychologically prepared, and the outside world is concerned about whether the stimulus to US stocks will weaken. According to the track record, after the Reserve Bureau cut interest rates by 0.25 per cent for three consecutive times, the index all recorded positive returns.
The track record shows that the index has risen and stimulated for a long time.
The Reserve Bureau cut interest rates by 0.25 per cent for three consecutive times, and it appeared in 1975, 1996 and 1998. Financial institutions LPL Financial data showed that the index rose an average of 2.2% in the first month after three consecutive interest rate cuts.
According to LPL statistics, the interest rate stimulating effect seems to be very long-lasting. In the three months after three consecutive interest rate cuts, the average increase of the index increased to 7.9%. The average increase after 6 months was 10.1%, and increased to 20% after 12 months. .
Among them, especially in 1998, the stock market responded best, and the interest rate cuts in one month, six months and 12 months later led the average increase. However, the end of the US stock market surge was the bursting of the dot-com bubble burst that triggered the global plunge in 2000.
LPL senior market strategist Ryan Detrick pointed out that the three consecutive interest rate cuts in the late 1990s have succeeded in re-accelerating the slowing economy, and US stocks have performed quite well.
For the global market led by the US stock market, the interest rate cut by the Reserve Bureau has been a major positive news, but this time the situation is relatively special. First, the US stocks hit record highs this year, and the cumulative increase has been considerable. The index rose 21.3%, and the Nasdaq rose nearly 25%. Second, the Sino-US trade war continued, and the Reserve Bureau explained how to continue to cut interest rates at the high stock market, especially Having attention.
The Reserve Bureau confessed to the next step
As for the key to the future investment climate, it is bound to be the account of the next step. However, the task is arduous, such as taking the steel line, and releasing the wrong signal at any time. The market generally expects that the Reserve Bureau will not cut interest rates again this year. However, if the “eagle" is overwhelmed, it will undoubtedly disappoint the market.
The Reserve Bureau previously said that interest rate cuts are insurance cuts to offset the Sino-US trade war and the global economic slowdown, but the US economic situation and Sino-US trade negotiations are progressing for a while, and it is unknown whether it will change direction.