Federal Reserve Chairman Jerome Powell has clearly indicated that a rate-cutting cycle will begin, which will provide more resilience for the global stock market's continued rebound. Powell, deviating from his usual cautious stance, explicitly stated that "it is time to adjust policy now" and that "the policy direction is clear." This will act as a kind of "Powell put," similar to the famous "Greenspan put" that supported the U.S. stock market during the Greenspan era
From the perspective of the Indian market, this move is significant as it will strengthen the minority view held by two independent members of the Monetary Policy Committee in the last monetary policy meeting, who advocated for a rate cut. With India's core inflation rate at only 3% and economic growth slightly weak, the Monetary Policy Committee is likely to cut rates by 25 basis points at the next meeting. The resulting rise in bond prices will benefit banks, as valuations are reasonable, and banks will have good buying opportunities
On the other hand, further deterioration in tensions between Israel and Hezbollah could have a negative impact
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