Investors are eagerly awaiting today's Fed meeting. While a rate cut of 25 basis points is likely to be largely priced in, the markets are looking all the more to the subsequent FOMC press conference with Jerome Powell. Important economic data will also remain on the agenda in the second half of the week. Hopes for a possible Christmas rally remain for the time being.
DAX Chart
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Interest rate cut of 25 basis points expected - Powell rhetoric likely to be put on the gold scale
The Federal Reserve's (Fed) interest rate decision, which is expected this evening at 20:00, has the potential to set the course not only for a possible Christmas rally, but also for the development in the new year 2025.
Investors are strongly expecting interest rates to be cut by a quarter of a percentage point to a range of 4.25 to 4.50 percent.
Of greater interest, however, will be the monetary policy hints Jerome Powell gives at the FOMC press conference (20:30).
Due to possible inflation concerns under the new Trump administration, the Fed could adopt a tighter monetary policy in the coming year than recently thought. An interest rate pause at the first meeting in 2025 (29.01.) would be conceivable in this context.
US GDP could weaken - Bank of England and People's Bank of China also decide on key interest rate
On Thursday, the focus will initially be on new GfK consumer sentiment data (08:00).
In particular, the annualized GDP growth rates for the United States are likely to attract attention (14:30). Economists expect a rate of 2.8 percent compared to the previous quarter, after previously 3.0 percent.
The weekly initial claims for US unemployment benefits usually attract interest at the same time.
Even though the Fed meeting is likely to be the focus of attention overall, investors should not forget the interest rate decisions by the Bank of England (BoE) on Thursday and the People's Bank of China (PboC) on Friday night.
Focus on price data on both sides of the Atlantic
On Friday, new producer prices will first come into focus here in Germany (08:00).
Another highlight awaits investors at the end of the week with the so-called PCE deflator for personal consumption expenditures (14:30). This US price data is seen not least as an important guideline for future inflation. An increase of 0.2% is expected compared to the previous month (previously: 0.3%).
Consumer confidence data (Reuters/University of Michigan) will round off the trading week at 16:00.
