Impact of ‘Rate Cuts’ on Stock Markets | What does rate cuts actually mean? #short s#stocks

📉Decoding the impact of rate cuts:👇

- Lowering rates typically makes borrowing money cheaper, which can encourage both consumer spending and business investment.

- This is good news for consumers, as it likely means lower interest rates on mortgages, car loans and credit cards, making it more affordable to borrow and spend.

- Bond prices and interest rates have an inverse relationship.

- When interest rates go up, the prices of existing bonds go down. When interest rates go down, the prices of existing bonds go up.

- In general, you'll make more money buying bonds when interest rates are high.

- When interest rates rise, the companies and governments issuing new bonds must pay a better yield to attract investors. Your investment return will be higher than it would be when rates are low.

- Typically, when stocks go up, bond prices drop.
Investors are simply following the money. When stocks are rising, they prefer to put their money in stocks rather than bonds.

✅The Bottom Line:

Interest rates and bond prices have an inverse relationship. When interest rates go up, the prices of bonds go down, and when interest rates go down, the prices of bonds go up.
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Видео Impact of ‘Rate Cuts’ on Stock Markets | What does rate cuts actually mean? #short s#stocks канала Mohit Lamba