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2025-09-17 20:34:20
The Extent of the Rate Cut Becomes Market Focus: 25 or 50 Basis Points, Two Contradictory Opinions. (1) TA Securities analysis indicates that if the Federal Reserve cuts interest rates by 25 basis points to a range of 4.00%-4.25% as planned, the market may see a "buy the forecast, sell the reality" scenario, as investors have already widely priced in this expectation. This rate cut will be seen as a prudent "insurance" measure aimed at maintaining growth momentum without signaling economic distress. Against this backdrop, consumer staples, healthcare, and technology stocks, which benefit from low borrowing costs and have defensive or long-term growth potential, are expected to outperform. However, financial stocks may face earnings pressure due to narrowing net interest margins and may underperform the broader market. (2) TA Securities further analyzes that if the Fed suddenly cuts interest rates by 50 basis points, it may initially boost interest rate-sensitive sectors such as real estate and utilities. However, this move could also exacerbate market concerns about the extent of economic weakness, suggesting that the Fed's outlook may be more pessimistic than the market anticipates. This shift in expectations from a "soft landing" to a "hard landing" is likely to dampen market sentiment and trigger a sharper correction, especially in cyclical sectors such as energy and industrials. Even the technology sector may face valuation pressure unless its profitability demonstrates strong resilience.
