If Fed stops cutting rate, the stock market may look really ugly?

Speculators and investors alike have been living under a low interest rate or a negative interest rate environment for a long time. If the Fed stops cutting rate now, I have no doubt that the stock market in US and other regions may look really ugly or uglier:

The first problem would be how to support the recovery of the US housing market. Would you expect the housing market to cheer up when the Fed stops cutting rates?

The next question is would such change by the Fed help our dear big banks and financials? Well, you know the answer; they don't flourish too well even with unending rate cut since last Sep.

Perhaps the most important question is whether the change in rate policy would likely curb inflation e.g. high oil and food prices? Yes, we may agree that the Fed's rate cut has caused USD to fall freely so far and a weakening USD will fuel higher and stronger inflation in all respects. But is that the only factor or the primary factor? Again, you should have the answer. High fuel and food prices, etc., won't go away even with a strong USD.

A stronger USD will have lots of negative impacts on several areas. MNCs exporting to non-US territories may find a stronger USD a hindrance to their competitiveness. Countries paying imports in USD will have to pay more and indirectly the cost will add to their local inflation index. Of course, if you are selling Japanese cars in US, you may find it easier when USD climbs against the Yen. But such growth will come is doubtful. Why? The US economy is having a slowdown or recession and no matter how optimistic you like to be, sales should slowdown. Well, that depends on what you are selling to US. If you are selling fuel, basic materials and metals or food, a stronger USD may promote higher demands for such goods or commodities and give support for higher prices again. It's never easy to beat high prices when inflation has become so deep-rooted.

The Fed surely has a very difficult task now. Perhaps, inaction is the only wise step to take at this stage. But once you pause the rate cut, the weather will change very quickly. Several central banks having been raising rates or proclaiming to do so. China, India, Australia, Europe, Brazil, even Japan... When this trend is also matched by the Fed's inaction, who can dispute that that will inevitably be the end of rate cut and the beginning of rate hike?

Perhaps, the Fed's Statement will deal with all our worries but unless you have a big crystal ball, whatever you say in such statement, you may end up on the wrong side. What a difficult task! I think Greenspan can sleep better than Ben.

God bless us all.