Motilal Oswal – ThePrint – ANIFeed

New Delhi (India), September 13 (ANI): As the US Federal Reserve’s expected interest rate cut date (September 18) approaches, investors remain cautiously optimistic about its potential impact on various sectors.

The report highlighted that the healthcare sector will be the fastest growing vertical in the next 12 to 18 months. Despite the high agnosticism towards rate cuts, healthcare is expected to grow due to the minimal threat of insourcing.

The report said the resilience of the healthcare sector, coupled with demand for innovation in biotechnology, clinical research and digital health solutions, make it one of the main beneficiaries of the upcoming interest rate cuts.

“Healthcare will be the fastest-growing vertical over the next 12-18 months. The sector is largely unaffected by the tailwinds of lower interest rates,” the report reads.

Another sector, manufacturing, also stands out as having high growth potential, particularly due to technological advances that could take hold during the rate-cutting cycle. The report notes that lower interest rates are expected to spur investment in technology, further accelerating the industry’s recovery.

While the sector faces some challenges, such as limited penetration of IT services in Europe, the report identifies opportunities in technologies such as generative artificial intelligence (GenAI), digital twins, IoT and connected factories.

“The manufacturing sector also shows strong signs of recovery; the interest rate cut cycle is expected to boost technology investment, and the threat of insourcing in this area remains fairly low,” the report added.

However, the report also pointed to challenges in the banking, financial services and insurance (BFS) sector, which faces significant threats from insourcing despite the positive impact of interest rate cuts. While there is some pre-GenAI spending in BFS, GenAI adoption may be slower in this sector due to the complexity of enterprise-wide transformation.

The report said that “BFS is enjoying the positive effects of the interest rate cuts but faces significant challenges due to the severe threat of insourcing, which limits its recovery potential.”

On the other hand, the retail sector is expected to benefit from interest rate cuts as increased consumption in consumer markets, especially in the US, should boost economic growth.

The report highlighted that the sector could shift its approach from cost-cutting strategies to revenue-generating initiatives.

Finally, the high-tech sector ranks fifth in terms of benefiting from interest rate cuts, according to the report. While interest rate cuts may have a moderately positive impact on the sector, the threat of insourcing remains high. Many software companies are expected to maintain tight control over their intellectual property, limiting the options of suppliers.

Overall, the report identifies healthcare and manufacturing as the sectors that are set to benefit the most from the expected rate cut by the US Federal Reserve, while also highlighting opportunities and challenges in the BFS, retail and high-tech sectors. (ANI)

This report is generated automatically by ANI news service. ThePrint is not responsible for its content.