Indy Telecom & Industrial Media

For the first time since 2003, the Federal Reserve lowered its interest rate from 5.25% to 4.75%. Most people expected a cut of maybe 0.25%, but a cut of 0.5% was significantly higher and perhaps underscores the serious concerns about the economy.

While this may not directly affect consumers, this will have an impact on the prime lending rates of most financial institutions in the country. And interestingly enough, the stock market seems to have soared with the news with significant gains.

So, is this merely going to postpone the inevitable or will the extra financial liquidity be used “wisely”?

Personally, I think that this could be a boon for FIIs to invest in other more stable markets (e.g. Asia). This would not necessarily peg the investors to a market that might go into recession in the near future.

Either way, it would be interesting to see how the market reacts to this in the long term.