a 50 basis point rate cut was already priced into the market [View all]
the market might have been mildly surprised that the fed chose to do it today rather than wait until the next fomc meeting on march 18, but the market had already priced in a 100% chance of a 50 basis point rate cut.
from time to time, and particularly when the market is volatile, i keep an eye on this website:
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
it converts the interest rate futures market pricing data into the implied percentage probabilities of the various rate cut possibilities.
yesterday it showed the markets were expecting a 100% chance of a 50 basis point rate cut.
this means that the market soaring yesterday was in expectation of this rate cut, today's market is merely getting comfortable with the fact that the expectations turned out to be right, plus some adjusting to the idea that it happened today rather than in two weeks.
beyond that, the market is trying to find a bottom, and there's always a ton of volatility when it does that.
politically, i wouldn't read too much into today's market "reaction" to the rate cut -- it essentially reacted yesterday.
fwiw, i think the cut was pretty unambiguously correct. i don't think this was a political decision at all. it was unanimous and the expectations of recession have increased remarkably in just the last week or so as china is severely curtailing their economy in a (likely futile) effort to contain covid-19.
inflation expectations have similarly plummeted for largely the same reasons.