#FedRateCutAffectsDollarTrend How a Fed Rate Cut Affects the Economy & Markets A Federal Reserve rate cut lowers the federal funds rate, making borrowing cheaper and encouraging economic activity. Here’s how it affects different areas: 1. Economy Encourages Borrowing & Spending → Lower interest rates reduce loan costs, boosting business investment and consumer spending. Stimulates Economic Growth → Easier credit access can increase hiring and economic expansion. Reduces Savings Incentives → Lower rates mean lower returns on savings accounts and bonds. 2. Stock Market Bullish for Stocks → Lower rates make equities more attractive as borrowing is cheaper and future earnings become more valuable. Growth & Tech Stocks Benefit Most → These sectors rely heavily on debt financing. 3. Bond Market Existing Bond Prices Rise → Lower rates make older bonds with higher yields more valuable. Yields Fall → New bonds offer lower interest rates.