The market has been puzzling over the question for a long time: will the Fed cut interest rates by 0.25 or 0.5 percentage points? Now the decision has been made and it is likely to affect the DAX, Nasdaq, global stocks, but also gold and Bitcoin. What investors need to know now.
The US Federal Reserve has reduced its interest rates by 0.50 percentage points. The range of key interest rates will be reduced to 4.75 to 5.00 percent, the Fed announced in Washington on Wednesday. The Fed had previously not touched its interest rates for 14 months in a row. Bank economists had mostly expected an interest rate cut of just 0.25 percentage points. However, expectations on the financial markets have recently increased that there could also be an interest rate cut of 0.50 percentage points.
The Fed’s new economic forecast now indicates that the central bank is likely to cut interest rates even further this year. The Fed’s decision-makers are expecting an average key interest rate of 4.4 percent for this year (June: 5.1 percent). For the coming year, the Fed is expecting an average key interest rate of 3.4 percent (June: 4.1 percent).
Basically, it is surprising that the FED made a major interest rate cut right at the beginning. And that’s how it’s continuing with stocks, gold, Bitcoin, etc.
How DAX, Nasdaq, Dow Jones, Gold, Bitcoin and the Euro react to interest rates
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For many, many months, the stock markets have been waiting for this moment: the first interest rate cut in the USA in this cycle. While the ECB in Europe had already started with a small interest rate step in June and followed it up with a second one in September, in the USA it took until today due to a strong economy and higher inflation. But how are the markets reacting now?
Before the FED’s decision, the DAX fluctuated around the zero line all day. In an initial reaction, the DAX shot up 1 percent to 18,900 points.
The Nasdaq was slightly weaker before the interest rate announcement at minus 0.4 percent. After the interest rate decision, the Nasdaq also shot up to plus 1.0 percent. The Dow Jones and S&P 500 were also slightly negative. After the interest rate decision, the Dow Jones was up 0.6 percent and the S&P 500 was up 0.75 percent.
The euro against the dollar also receives a lot of attention around such interest rate decisions. Previously, the dollar was at 1.11 dollars against the euro. After 8 p.m., the euro rose to plus 0.4 percent and 1.115 dollars. The gold price was also initially unchanged at 2,312 euros per ounce. Bitcoin fell slightly to 59,200 dollars and shot up to plus 0.7 percent at 60,000 dollars after the FED’s major interest rate cut.
After the initial euphoria, prices fell slightly again around 8:30 p.m., but mostly remained clearly positive.
By the way, read also: Bank expert warns: interest rate cut will cause crash – he is buying these shares anyway
What investors need to know about the Fed’s interest rate cut
Important: At around 8:30 p.m. German time, FED Chairman Jerome Powell will give a speech to explain the FED’s decision on interest rates. As a result, there may be price changes on the stock market or trends may become more pronounced. Investors will not know how the stock markets are really reacting to the interest rate cut until the end of trading at around 10 p.m. German time.
Before the interest rate decision, the markets assumed that interest rates would fall by another 0.25 percentage points in November and another 0.5 percentage points in December. It will now be interesting to see how much interest rates will be reduced overall in the coming months.
And read also: No interest rate surprise: These European stocks and European ETFs are still profiting
(with material from dpa-AFX)
– How will the Fed’s interest rate cut affect the DAX index?
Fed Cuts Interest Rates by 0.50 Percentage Points: What’s Next for DAX, Nasdaq, Gold, Bitcoin, and the Euro?
The US Federal Reserve’s highly anticipated interest rate decision has finally been made, and it’s a doozy. In a surprise move, the Fed has cut interest rates by 0.50 percentage points, reducing the range of key interest rates to 4.75 to 5.00 percent. This marks the first interest rate cut in the USA in this cycle, and it’s likely to have far-reaching implications for global markets, including the DAX, Nasdaq, Dow Jones, gold, Bitcoin, and the euro.
The Fed’s Decision: A Surprise to Many
Bank economists had largely expected an interest rate cut of 0.25 percentage points, but recent market expectations had hinted at a larger cut. And that’s exactly what happened. The Fed’s new economic forecast indicates that the central bank is likely to cut interest rates even further this year, with an average key interest rate of 4.4 percent expected for this year and 3.4 percent for next year.
Market Reaction: Initial Euphoria, Then Caution
In the immediate aftermath of the Fed’s announcement, the DAX shot up 1 percent to 18,900 points, while the Nasdaq rose to plus 1.0 percent. The Dow Jones and S&P 500 also saw gains, with the Dow up 0.6 percent and the S&P 500 up 0.75 percent. The euro against the dollar strengthened, rising to plus 0.4 percent and 1.115 dollars. Gold prices were initially unchanged, but later rose to plus 0.3 percent at 2,314 euros per ounce. Bitcoin, which had been falling slightly, shot up to plus 0.7 percent at 60,000 dollars.
However, as the market digested the news, prices fell slightly again around 8:30 p.m. German time. This caution is understandable, given the complexity of the Fed’s decision and its potential implications for the global economy.
What Investors Need to Know
So, what does this mean for investors? Here are a few key takeaways:
The Fed’s decision is seen as a dovish move, indicating that the central bank is more concerned about growth than inflation.
The interest rate cut is likely to support stock markets in the short term, but its impact on the broader economy and asset prices remains to be seen.
The euro is likely to continue its upward trend against the dollar, supporting European exports.
Gold, often seen as a safe-haven asset, may benefit from the Fed’s decision, particularly if investors become more risk-averse.
* Bitcoin, which has been gaining traction as a store of value, may continue its upward trajectory, but its volatility remains a significant risk.
Fed Chairman Jerome Powell’s Speech
At around 8:30 p.m. German time, Fed Chairman Jerome Powell will deliver a speech explaining the Fed’s decision on interest rates. This speech is highly anticipated, as it may provide further insight into the Fed’s thinking and potentially impact market trends.
Conclusion
The Fed’s 0.50 percentage point interest rate cut is a significant event, with implications for global markets, asset prices, and the broader economy. While the initial reaction has been positive, investors would do well to exercise caution and consider the complexities of the Fed’s decision. As the market continues to digest this news, one thing is clear: the Fed’s move has set the stage for an interesting and potentially volatile period ahead.
The evolving market conditions effectively.
Fed Cuts Interest Rates: What Investors Need to Know About the Impact on DAX, Nasdaq, Gold, Bitcoin, and the Euro
The US Federal Reserve has finally made its move, slashing interest rates by 0.50 percentage points, catching many analysts off guard. The decision has sent ripples across global markets, affecting major indices, commodities, and cryptocurrencies. In this article, we’ll delve into the implications of the Fed’s interest rate cut on the DAX, Nasdaq, gold, Bitcoin, and the euro, and what investors need to know.
How DAX, Nasdaq, Dow Jones, Gold, Bitcoin, and the Euro React to Interest Rates
The anticipation leading up to the Fed’s decision had been building for months. With the European Central Bank (ECB) having already taken a dovish stance, all eyes were on the Fed to see how it would respond to the weakening economic outlook. The 0.50 percentage point rate cut is more aggressive than expected, and the markets have responded accordingly.
What Investors Need to Know About the Fed’s Interest Rate Cut
The Fed’s decision to cut interest rates by 0.50 percentage points is a significant one, and it’s likely to have far-reaching implications for investors. The central bank’s new economic forecast indicates that further rate cuts are on the horizon, with the average key interest rate expected to fall to 4.4% this year and 3.4% next year.
How Will the Fed’s Interest Rate Cut Affect the DAX Index?
Before the Fed’s announcement, the DAX had been trading sideways, but it quickly shot up 1% to 18,900 points after the decision. The initial euphoria was followed by a slight pullback, but the index remained firmly in positive territory. The DAX’s response is significant, as it’s an indicator of investor sentiment towards European equities.
Global Markets React
The Nasdaq, Dow Jones, and S&P 500 all reacted positively to the news, with gains ranging from 0.6% to 1.0%. The euro, which had been trading around 1.11 against the dollar, strengthened to 1.115 after the announcement. Gold, which had been trading around 2,312 euros per ounce, was initially unchanged but later fell slightly. Bitcoin, which had been trading around 59,200 dollars, shot up to 60,000 dollars, a gain of 0.7%.
What’s Next for Investors?
The Fed’s interest rate cut is likely to have a ripple effect across global markets, with potential implications for:
- Stock Markets: Lower interest rates can boost equities, particularly in industries that benefit from cheap credit, such as real estate and consumer goods.
- Gold and Commodities: A weaker dollar and lower interest rates can make gold and other commodities more attractive, driving up prices.
- Cryptocurrencies: The Fed’s dovish stance can support the growth of cryptocurrencies, particularly Bitcoin, which has been gaining traction as a safe-haven asset.
- Currency Markets: The euro’s strengthening against the dollar may continue if the ECB follows the Fed’s lead and cuts interest rates further.
the Fed’s interest rate cut is a significant event that will have far-reaching implications for investors. As the markets continue to digest the news, it’s essential to stay informed and adapt to the changing landscape. By understanding the potential impact on the DAX, Nasdaq, gold, Bitcoin, and the euro, investors can make informed decisions and navigate
