KOSPI · September 19, 2007

The day the Fed cut by a half, not a quarter

+3.48%

single-day change vs previous close

Part of a longer stretch

The 2007 Fed-cut relief rally

near the end of it · 2007-08-17 → 2007-10-02, +22.96% over the whole period

What happened that day?

The KOSPI rose 3.48% on the day
The Fed had cut its policy rate by half a point the night before — twice the size markets expected
The size mattered less than the message: the Fed was treating a housing problem as something that could spread through the whole financial system
The KOSPI, knocked down by the first subprime shock that August, used this cut to regain its old high within six weeks
In hindsight the relief did not last. The same problem broke far more violently the following year
This recovery stretch ran to early October

Sources

KOSPI

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.