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Thread: Global shares soaring while Fed cut interest rate!!!

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[quote=LEOPOLD219,247247]As investors expected, US Federal Reserve cut the benchmark interest rate basis 50 points to 4.75% to help its economy recover from the credit crisis.

Following the interest cut, global shares all surged. In New York, the Dow jumped about 330 points. Short-term bond prices also jumped.  Asia stock market also surged. Hang Seng Index in Hong Kong jumped 4 percent.  Markets in Mumbai, Singapore, Seoul and Tokyo all rose by more than 3 per cent. Europe stock markets rose too. CAC40 in Paris, the FTSE in London, DAX in Frankfurt almost rose about 2 percent with the interest cut in US.

This is the first time Fed has cut the interest rate since 2003. Last interest cut occured in 2001 when the stock market bubble broke. The main purpose is to help economy recover from slipping further. While investors applausing for this move, some observers showed their concerns that the rate cut may prompt a return to the reckless lending practices that caused the market's problems in the first place and more problems might be created. Dollar is the victim of the interest cut. It has dropped to its lowerest period in 15 years. This is not a good news. Meanwhile, the surging prices of shares does not suggest that the turmoil is over now.

However, some investors still have positive attitude toward this move. Some estimate that interest cut might have not finished and the Fed might cut its interest again.  What's more, some analysts say that the sudden interest cut will impose negative effect over China's econmy.

What do you think? Is the interest cut finished? Will China's economy be influenced by the Fed rate cut?

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