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From status quo to 50 bps rate cut: Three scenarios for Indian stock markets that will depend on Fed decision

Some analysts opine that a 25 bps rate cut by the US Federal Reserve should be expected, while others hint at a bumper 50 bps cut.

September 17, 2025 / 13:14 IST
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The US Federal Reserve is holding its FOMC meeting from September 16 to September 17. Analysts increasingly expect the American central bank to cut the key interest rate this time amid weakening jobs data and rising pressure from President Donald Trump's administration.

However, experts who spoke to Moneycontrol held different opinions regarding the quantum of rate cut that Fed chief Jerome Powell may announce this week. Some opine that a 25 bps rate cut should be expected, while others hint at a bumper 50 bps cut. Very few, however, hold the view that the American central bank may keep the rates unchanged.

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Then how will Indian stock markets react? Let's take three scenarios – no rate cut, 25 bps rate cut and 50 bps rate cut. Here's how market experts anticipate Indian stock markets to react in each of these scenarios:

Scenario 1: Fed cuts rates by 25 bps