Stock Markets React Moderately Positive to US Federal Reserve's Interest Rate Outlook

At the global stock exchanges, the interest rate policy of the US Federal Reserve provided a slight boost. In the United States, both the Dow Jones Industrial and the S&P 500 marked new highs, with the technology-heavy Nasdaq 100 also recording gains. The reaction was similarly positive in Germany, where the X-Dax indicated higher values in the evening and thus offered prospects for a fresh record high for the Dax. Landesbank Baden-Württemberg analyst Elmar Völker commented on the development with reference to the Fed, which continues on the path towards an interest rate correction within the current year. The so-called 'Dot Plot' of the central bank consistently signals that three rate cuts are to be expected by year-end – a hint that the first step towards a cut in key interest rates may no longer be far off. Nevertheless, it is premature to give the all-clear, the analyst warns. The latest US inflation data showed a slower easing than hoped for at the end of the year. Völker viewed the signals from Washington as being two-fold: On one hand, June could already be considered the earliest possible time for a rate adjustment. On the other hand, should price controls continuously prove to be more resilient, this expected pivot could well be delayed into the summer. In summary, the situation at the markets presents itself as a reaction to a mixed message from the Fed, which investors are closely monitoring and interpreting.