Report: Health and manufacturing sectors to benefit from Fed cutting interest rates

New Delhi| As the US Federal Reserve’s projected rate cut date (September 18) approaches, investors are assessing its potential impacts on various sectors. According to a report by Motilal Oswal, the healthcare and manufacturing sectors are expected to benefit the most from the Fed’s decision to reduce interest rates. This report indicates strong growth prospects in the coming months.

The report highlights that the healthcare sector will be the fastest growing sector in the next 12 to 18 months. Despite being largely indifferent to rate cuts, healthcare is expected to flourish due to the minimal threat of insourcing. The report suggested that rate cuts would have a positive impact on these sectors due to healthcare flexibility, biotechnology, clinical research and demand for innovations in digital health solutions. “Health care will be the fastest growing sector in the next 12-18 months”, the report said. The sector is largely indifferent to the conditions conducive to rate reductions”

Another sector, manufacturing, also stands out with high growth potential, particularly due to technological advances that can adapt to it during the rate reduction cycle. The report said lower interest rates are expected to boost investment in technology, which will further accelerate the industry’s recovery. While the sector faces some challenges, such as limited IT services penetration in Europe, the report identified opportunities in technologies such as Generative AI (GenAI), Digital Twins, IoT and connected factories. On the other hand, the retail sector is expected to benefit from rate cuts because increased consumption in customer markets, particularly in the US, could boost growth.