US Federal Reserve Cuts Interest Rates by 2 Percentage Points

The US Federal Reserve’s latest monetary policy decision in September has cut interest rates by 2 percentage points at a time, which is in line with market expectations, according to Yang Boxiang, fund manager of HSBC’s Super Core Multi-Asset Fund. The latest dot plot forecast indicates that the median interest rates will fall this year and next.

The federal benchmark interest rate was lowered to an interest rate range of 4.75-5.00%. HSBC Investment Credit pointed out that the double-digit reduction at a time will significantly reduce market speculation on the path of monetary policy before the end of the year and have a positive effect on the stabilization of the financial market.

Yang Boxiang, fund manager of HSBC’s Super Core Multi-Asset Fund, further explained that the Federal Reserve’s interest rate cut has attracted a lot of attention, and this “dodgy” interest rate cut has opened a monetary policy easing cycle, which has a very positive significance to the investment market. According to historical experience, if the economy encounters a recession within 12 months after an interest rate cut, stocks will fall on the contrary, if the economy does not encounter a recession, stock assets will have a positive performance bond after the interest rate cut cycle begins.

Looking forward to the market outlook, Yang Boxiang believes that geopolitics and US presidential election issues may continue to disturb the investment atmosphere from time to time, therefore, it is recommended that investors can continue to choose multi-asset funds with a wide range of themes as the core layout strategy. Among them, the stock position can focus on topics with long-term growth trends such as AI technology, and pair it with infrastructure stocks that have dividend advantages and defensive advantages. In the bond situation, low volatility bonds can be allocated to further reduce investment volatility and increase opportunities to earn interest.