Some people are confused they think rate cuts causes recession and plunged the markets.
It is the other way round rate cuts are implemented to save the economy it signifies an economy downturn is around the corner.
It is a lagging indicator meaning Recession is already underway so they have to do rate cuts
Yes, that's a reasonable interpretation. Rate cuts by central banks, such as the Federal Reserve, often signal concerns about economic conditions. While the intention behind rate cuts is typically to stimulate economic activity and prevent or mitigate a downturn, they are often a response to existing or anticipated economic weakness.
Here are some points to consider:
1. **Sign of Economic Concerns**: Central banks typically cut rates when they see signs of economic slowing, such as reduced consumer spending, declining business investment, rising unemployment, or other indicators of economic stress.
2. **Lagging Indicator**: Rate cuts often come after the initial signs of economic trouble have appeared, meaning the economy may already be in or near a downturn by the time the cuts are implemented.
3. **Mixed Signals**: While rate cuts aim to encourage borrowing and investment by making credit cheaper, they can also be perceived as a signal that the central bank is worried about the economic outlook.
4. **Effectiveness**: The effectiveness of rate cuts in preventing or shortening a recession depends on various factors, including the underlying causes of the economic
i think rate cuts this time maybe will go up then down again. see whether im correct
nowadays markets react oppositely compared to 10-20 yrs ago
Quote from: default on Jul 13, 2024, 02:12 PMi think rate cuts this time maybe will go up then down again. see whether im correct
nowadays markets react oppositely compared to 10-20 yrs ago
Don't think will recession in a president election year maybe next year
Quote from: Nevereatrice on Jul 13, 2024, 02:30 PMDon't think will recession in a president election year maybe next year
biden kns leh
Quote from: Nevereatrice on Jul 13, 2024, 01:44 PMSome people are confused they think rate cuts causes recession and plunged the markets.
It is the other way round rate cuts are implemented to save the economy it signifies an economy downturn is around the corner.
It is a lagging indicator meaning Recession is already underway so they have to do rate cuts
rate cut means bank pays lesser interest.
no incentive to put money in bank to earn interest
so ppl will spend or invest other places.
it is to make ppl spend and simulate the economy.
rate rise is opposite.
it is moar appealing to save money coz the bank interest ish high.
this will have the eeffect of ppl stop spending money anyhow.
:frown:
As long as ssb rate maintain high I happi liao :frown:
Quote from: luckyapple on Jul 13, 2024, 07:24 PMAs long as ssb rate maintain high I happi liao :frown:
Rate cut means ssb t-bills and sgs bonds also should drop.
Quote from: luckyapple on Jul 13, 2024, 07:24 PMAs long as ssb rate maintain high I happi liao :frown:
ssb no use one lah. follow us fed :frown:
Quote from: Tony.Manero on Jul 13, 2024, 07:57 PMRate cut means ssb t-bills and sgs bonds also should drop.
Hais :frown: ok mybfd.
Quote from: jim889 on Jul 13, 2024, 05:14 PMrate cut means bank pays lesser interest.
no incentive to put money in bank to earn interest
so ppl will spend or invest other places.
it is to make ppl spend and simulate the economy.
rate rise is opposite.
it is moar appealing to save money coz the bank interest ish high.
this will have the eeffect of ppl stop spending money anyhow.
:frown:
Means taim to all in stocks and crypto :frown:
Quote from: Banned User on Jul 13, 2024, 09:55 PMMeans taim to all in stocks and crypto :frown:
can spending any how chiu rike
:flash: