The interest rate decision by the US Federal Reserve gave new impetus to the German stock market on Thursday. In early trading, the Dax climbed above its previous high for the year from mid-January, most recently gaining 0.76 percent to 15,296.33 points. The MDax for medium-sized companies increased by 1.72 percent to 29,344.99 points. The EuroStoxx 50, the leading index in the euro zone, rose by 0.8 percent.
As expected, the Fed raised its key interest rate by 0.25 percentage points and held out the prospect of further monetary tightening. Statements by Fed boss Jerome Powell would have been less “hawkish”, Commerzbank said in the morning. What is meant by this expression is a somewhat less harsh monetary policy stance. The experts at ING Bank are now only expecting another rate hike by the Fed of another 0.25 percentage points in March. Recessionary forces would then pave the way for rate cuts later in the year, they suspect.
In New York, the Dow Jones Industrial recovered losses following the Fed’s decision, while technology stocks went into rally mode. Added to this are the strong after-hours results of the social media group Meta as a mood driver. The shares of the Facebook and Instagram group jumped in price by a good 20 percent.
On Thursday, all eyes are now on the European Central Bank (ECB), which, like the Bank of England, will give its interest rate decision and signals for the future course of monetary policy in the afternoon. The ECB is likely to continue its fight against high inflation. Many bank economists expect interest rates to rise another 0.5 percentage points.
