The Fed meets again today; ahead of the rate cut session, most investors would prefer to play safe. There is a raging debate going on whether the Fed will cut its rate by a quarter or half a point! Clearly, half a point cut would be too good to digest, even in the short term. Realistically speaking, a quarter point cut seems much more likely given the improving scenario.
However, I guess I shouldn't be saying so much! Last time the Fed met to decide on the rate cut, I'd erred on the side of caution! Almost missed the rally that zoomed and broke all records! Hoping for a second such rally would again be too optimistic! The rise of the Sensex hasn't seemed that confident whenever the index has crossed the 20k mark. Again, the first time the rate cuts came as a pleasant surprise; this time around, with almost everyone looking for a cut, the markets will react quite sharply and negatively if the Fed chooses to ignore the investors' sentiments.
On a rather pleasing note, I'm quite happy to see the rebound in the IT stocks! Lets see what tomorrow brings!
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