#FedRateCutAffectsDollarTrend Fed Rate Impulses in the Market Fed rate impulses refer to the immediate and long-term effects that changes in the Federal Reserve’s interest rates have on financial markets, particularly forex, stocks, and bonds. These impulses create price fluctuations, volatility, and shifts in investor sentiment. 1. Immediate Market Reactions (Short-Term Impulses) • Forex: USD experiences sharp volatility, with currency pairs like EUR/USD, USD/JPY, and GBP/USD reacting instantly. • Stock Market: High-interest rates typically lead to sell-offs, while rate cuts encourage stock buying. • Bonds: Treasury yields rise on hikes and fall on cuts, affecting fixed-income investments. 2. Long-Term Market Effects (Sustained Impulses) • Inflation Control: Higher rates reduce inflation by slowing down borrowing and spending. • Capital Flows: Higher rates attract foreign investments into USD assets, strengthening the dollar. • Economic Growth: Rate hikes slow economic growth, while rate cuts stimulate expansion.