The decision of the US central bank, the Federal Reserve, was eagerly anticipated. After careful consideration, it decided to maintain the benchmark interest rate in the range of 5.25 to 5.50 percent. Currently, the benchmark interest rate is at its highest level in 20 years. The financial markets had anticipated this decision, as the central bank had already kept its rates unchanged twice in a row.

However, the current decision also holds the prospect of future changes, as the currency guardians indicated a possible reduction of the key interest rate by 0.75 percentage points over the course of the coming year.

The head of the US central bank, Jerome Powell, recently emphasized that it is still too early to speculate about possible monetary policy loosening. However, the updated interest rate forecast from the Federal Reserve shows that the monetary policymakers could be considering a possible interest rate cut starting from the summer of next year.

This assessment is also shared by KfW Chief Economist Fritzi Köhler-Geib, who speculated in advance of the meeting about a first interest rate cut next summer.

An important factor for the financial markets is also the inflation pressure, which recently decreased further. In November, the inflation rate fell to 3.1 percent, compared to 3.2 percent in October. This brings the desired inflation target of two percent gradually within reach, which is considered optimal for the economy.

Despite the tight monetary policy, the economy proves to be resilient. In the third quarter, it grew at an annualized rate of 5.2 percent, which is the highest speed in almost two years. The central bank pursues a tight monetary course in order to combat inflation without affecting the economy.