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Why a Fed rate cut generally means a bull run
Why does everyone shout that a bull run is coming when the Fed lowers interest rates?
In fact, this logic is not complicated; to put it simply, it comes down to one sentence: when money is too cheap, it won't just lie quietly in the bank.
Think about it, what does the Fed lowering interest rates mean? It means that the interest you earn by keeping your money in the bank is less, and it might even not keep up with inflation. So large amounts of capital are reluctant to stay in the bank and must look for places with higher returns to flow into. A
View OriginalWhy does everyone shout that a bull run is coming when the Fed lowers interest rates?
In fact, this logic is not complicated; to put it simply, it comes down to one sentence: when money is too cheap, it won't just lie quietly in the bank.
Think about it, what does the Fed lowering interest rates mean? It means that the interest you earn by keeping your money in the bank is less, and it might even not keep up with inflation. So large amounts of capital are reluctant to stay in the bank and must look for places with higher returns to flow into. A