Bank of America: The current market's reaction to the Fed's 50bp rate cut seems to be following the script of 'soft rate cuts' or 'panic rate cuts'.

On September 22nd, Jinshi Data reported that Hartnett, a well-known strategist at Bank of America, pointed out that the current market’s reaction to the 50 basis point rate cut by the Fed seems to be following the script of “soft rate cut” or “panic rate cut”. The U.S. stock and credit markets are digesting the expected 250 basis point rate cut by the Fed by the end of 2025 and the expected 18% rise in earnings of the S&P 500 index constituents. The “risk is not getting better”, so investors are forced to chase the rise, and the “bubble risk” is coming back. Hartnett explained in his latest report the reason for this festive pump, saying that when there is no panic (at least not yet), Wall Street loves “panic rate cuts” the most. At the same time, the Fed hopes to cut rates by 50 basis points, so that the actual interest rate can decrease from the highest level of this century, in order to prevent layoffs in the small business sector, which is already in recession.