Fed Finally Cuts Interest Rates, But What’s Next For India’s Markets & Gold Prices?

Mumbai: The US central bank (Federal Reserve) has cut interest rates for the first time in 2025. This step is expected to support the US economy. Fed Chairman Jerome Powell said the decision was not due to political pressure, even though President Donald Trump had been demanding a rate cut for a long time.

More Cuts May Come This Year

The Fed has also hinted that it may cut rates two more times this year. This is to help the weak US job market. In the recent two-day meeting, almost all Fed members supported the 25 basis points cut. Only one member, Stephen Miran, voted against it.

Demand for Bigger Rate Cut

Stephen Miran works with the White House and was earlier Trump's economic advisor. He wanted a bigger cut—50 basis points. Trump had promised rate cuts during his election campaign.

Current Interest Rate in the US

New interest rate: 4 percent to 4.25 percent

Repo operation rate: 4.25 percent

Interest on reserve balance: 4.15 percent

Reverse repo rate: 4 percent

Prime credit rate: 4.25 percent

Impact on Indian Market

This US rate cut could help Indian markets. Lower US interest rates may push foreign investors to invest in India for better returns. This could lead to growth in the Indian stock market.

Gold Prices May Go Up

Gold may also get a boost. When interest rates fall, investors often look for safer and better returns—like gold. So gold prices might rise further.

Why the US is Cutting Rates

The US job market is still weak. Looking at this and other economic risks, more rate cuts may happen in the coming months.