Following the US central bank's monetary policy event, investors initially appear relieved. The Fed's latest rate move is being received as a signal of monetary policy clarity and reliability. For the markets, this is the hoped-for anchor of stability in troubled waters. Investors are appreciating the clear line and monetary policy steadfastness.
DAX
US central bank raises interest rates as expected
For the first time since 2023, the US Federal Reserve (Fed) has raised the key interest rate by 25 basis points to a range of 3.75 to 4.00 percent. „Today's decision was the right one to fulfill Congress's mandate to ensure price stability,“ said Fed Chair Kevin Warsh. „The independence of the Federal Reserve also means that we focus on our area of expertise.“
However, investors had already anticipated the rate hike in question. According to the CME Group's „FedWatch Tool,“ 53.1 percent of market participants are already expecting another quarter-percentage-point rate hike at the meeting on October 28.
EU inflation at 3.2 percent in August – Initial US jobless claims and Fed speech in focus
According to the latest data from the EU statistical office Eurostat, the final inflation rates for the eurozone stood at 3.2 percent in August (compared to the same month of the previous year) and were thus slightly lower than expected (3.3 percent), following 2.9 percent in July. Compared to the previous month, however, price pressure increased by 0.4 percent, which is twice as strong as in the comparison month (0.2 percent).
Today, on Thursday, investors are also looking at the weekly initial jobless claims in the US (2:30 PM).
German producer prices are also expected here at 08:00 AM on Friday, which could provide monetary policy impulses.
A speech by Fed official Michelle Bowman at 3:30 PM could possibly provide monetary policy impulses.
