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A huge 50-point cut
The US Federal Reserve has cut interest rates by half a percentage point, lowering the benchmark rate to 4.75-5%. Members of the Federal Open Market Committee expect the rate to fall to 4.25-4.5% by the end of this year, a further half-percentage point cut before 2025. Members also raised their estimates for the unemployment rate this year to 4.4% from the 4% forecast in June.

Interest rate cut did not boost markets
US markets rose 50 points after the Fed cut interest rates, but were unable to hold on to their gains. On Wednesday S&P lost 0.29%, the Dow fell by 0.25% and the Nasdaq fell 0.31%. However, markets in the Asia-Pacific region recorded higher prices on Thursday. Hang Seng Index rose by around 1.8% as the city raised its interest rate by

Presidential prediction
According to a CNBC poll, US Vice President Kamala Harris has a better chance of winning the presidential election than former President Donald Trump. Of the 27 respondents, including investment strategists, economists and fund managers, 48 ​​percent believe Harris has a better chance of winning, 41 percent believe Trump has a better chance of winning, while 11 percent are not sure.

Taking the middle path
Ray Dalio, founder of Bridgewater Associates, told CNBC that the upcoming U.S. presidential election will be “the most consequential election of his lifetime” and that “neither candidate is what the country needs.” Separately, Dalio said the economy is “in relative equilibrium” but the Fed needs to perform a “balancing act” to keep interest rates neither too high nor too low.

(PRO) Best performing stocks after a cut
The Fed’s half-percentage-point rate cut is likely to lower Treasury yields, prompting yield-hungry investors to shift to riskier assets like stocks. But some stocks are more interest-rate sensitive than others. CNBC Pro has researched stocks to find the 10 names that are likely to gain the most after a rate cut.

The futures market was right.

Shortly before the Fed meeting, the central bank had priced in a 64 percent probability of a 50 basis point cut, according to the CME FedWatch tool. According to a CNBC survey, however, experts believed that a 25 point cut was more likely.

Such forecasts can be considered a completely unbiased matter. That is, the forecast is based on an objective view of the economic situation and weighs it against the risk of inflation.

These predictions can also express hope, which in turn can embody a wish for which there is no evidence.

And if that hope comes true, there may be a moment of panic in the markets.

After hitting record highs on the Fed’s announcement of a massive rate cut, the S&P 500 and Dow Jones Industrial Average ended the day lower. The same was true for the Nasdaq Composite.

It is difficult to understand what happened there because markets are so driven by sentiment that sometimes there is no explanation or evidence for those sentiments.

Fed Chairman Jerome Powell may have had this in mind. And he was probably aware that a larger than usual rate cut could be a sign that the Fed is worried about the economy.

Therefore, Powell spent much of the post-meeting press conference sugarcoating the mood.

“I don’t see anything in the economy right now that suggests the likelihood of a recession, sorry, a downturn is elevated,” Powell said.

Why then did the Fed decide not to keep the rate cuts at 25 basis points?

As if Powell had anticipated these concerns, he said in his opening speech that the decision marked a “recalibration” of policy. In other words, the Fed’s massive rate cut is a sign that the central bank is taking the lead in shaping monetary policy and is not reacting belatedly to the economic situation.

Investors will need some time to digest Powell’s assurances. After all, markets are largely irrational creatures and react instinctively to any big news.

—CNBC’s Jeff Cox, Yun Li, Hakyung Kim and Samantha Subin contributed to this story.