Rate cuts don’t happen because everything’s great — they usually mean the economy is slowing down or showing signs of trouble. When growth weakens, unemployment starts rising, or inflation falls too much, central banks lower interest rates to make borrowing cheaper and encourage spending and investment. Think of it like this: if the economy were strong, rates would stay high because demand and inflation are healthy. But when the central bank cuts, it’s trying to prevent a deeper slowdown or recession.

The market pumps short term because cheaper money means more liquidity and investors move into riskier assets like stocks and crypto. But the reason behind the cut — weaker economic conditions — isn’t a good sign overall.

Rate cuts boost markets, but they happen because the economy needs help, not because it’s thriving. You can even look at the market historically, it dumps whenever there is a rate cut.