some of my thoughts

Think it's safe to say I was fairly shocked by the Fed's decision to cut the rates by 50 bps. I ran to my usual sources after reading the news, and felt vindicated to find that several experts seemed to have the same line of thinking as me. I found myself perplexed on why the Fed decided to cut all 50 bps at once, especially if they plan to cut more as the year progresses, rather than cutting 25 now and 25 in the short-term. On the promise of a soft landing this drastic cut (which I believe has only happened once before) could have the opposite effect on the economy as a whole.

Likely the dealmaking market in the US will be spurred on by the cuts. Also the cuts signal at a stock market that will rally in the green. As a tech investment banker in 2022 and 2023, tech deals were few and far between. It was tough to watch the markets, and I was somewhat lucky that I was a generalist across consumer and sponsors as well. I'd maybe still not have worked on any closed deals if I was a dedicated tech banker!

A few interesting though experiments I thought of that could be ripple effects in India.

Stronger rupee (finally). For YEARS, one of the biggest criticisms of the Modi government was that they were not really able to get a grip on the rupee. When I left India in 2016 for Dubai initially, I remember the conversion being somewhere in the 60s. I continue to be shocked that it's close to 85 now! For sure, the Modi government did have some control and measures that could have been implemented to take care of these insane rises in prices. But pinning the whole thing on the BJP government may be unfair. Moving forward, probably the masses would realise this as well. The dollar weakening signals a stronger rupee, making it cheaper to important goods like oil, which we import a ton of. The stronger currency and lower import costs also indicate that, at least in the short term, the Indian government can have more control on inflation.

More foreign investment. When international rates fall, investors are more easily able and willing to borrow in the US and deploy in developing markets like India in search for higher returns. Higher returns = more risk. Lower rates = lower risk. Don't be shocked if the big international investors start deploying a lot more capital in India, driving up prices and valuations, but more necessarily, bringing some much needed liquidity to the dry Indian economy.

Keep an eye out for what the RBI does. If the rupee becomes too strong or too much international capital is flooding into India, I wouldn't be surprised if RBI cuts rates as well.