Wall Street Favors ‘Panic Rate Cuts’ Amid Bubble Risks, says BofA Strategist

COINOTAG News reported on September 22 that Hartnett, a renowned strategist at Bank of America, has observed that the market’s response to the Federal Reserve’s 50 basis point rate cut reflects a pattern of either a “soft rate cut” or a “panic rate cut”. Currently, both the US stock and credit markets are bracing for a projected 250 basis point rate cut by the Fed, alongside an anticipated 18% earnings growth for S&P 500 index constituents by the close of 2025. Hartnett noted, “The risks remain significant, compelling investors to pursue the rally,” while the threat of “bubble risks” looms once again. Hartnett’s latest report attributes this exuberant rise to the absence of widespread panic, as Wall Street historically favors “panic rate cuts.” Concurrently, the Fed aims for a 50 basis point reduction in interest rates to bring real interest rates down from their century-high levels, aiming to mitigate layoffs in the recession-stricken small business sector.