Frankfurt stock exchange - Dax experiencing losses - Fed's decision causing decline in stock prices
In the afternoon of Wednesday, a rise in US consumer prices in May led to a higher-than-expected growth in stock markets. However, in the evening, the US Federal Reserve (Fed) gave a hint that they were not in a rush to cut down interest rates. They projected only one rate cut for the year, which was a change from the anticipated three rate cuts. Everyone agreed that the Fed's next step would depend on the data, as mentioned by the Fed Chairman Jerome Powell.
Analyst Eric Winograd from the investment firm, AllianceBernstein, mentioned about a "holding pattern" in monetary policy. He doesn't foresee a major drop in US inflation. "I think the Fed will decrease rates merely once this year" - and that is likely to be in December.
Read also:
After the initial rise in stock markets due to high US consumer prices, the Frankfurt stock exchange, specifically the DAX, experienced losses. This decline was partly attributed to the US Federal Reserve's hint of not rushing to decrease interest rates. Instead, they projected only one rate cut for the year, contradicting the anticipated three cuts. Analysts, such as Eric Winograd from AllianceBernstein, suggest that these changes in monetary policy may lead to a "holding pattern" and only a minor drop in US inflation. Meanwhile, in Frankfurt am Main, other stock exchanges like the MDAX also saw a downward trend in shares.
