Dax continues to trend downwards - financial experts warn that expectations of interest rate cuts are too demanding

Dax continues to trend downwards - financial experts warn that expectations of interest rate cuts are too demanding

According to a report by www.t-online.de, the Dax remains in downward mode at the beginning of the new year. Investors are adjusting their interest rate cut expectations, leading to falling stock prices. Commerzbank experts point out that the Fed is open to lower interest rates, but may not start cutting in March - nor to the extent that markets are currently pricing in. Market observers at ING emphasize that the Fed indicated in its minutes of the last interest rate meeting that it is in no hurry to reverse the monetary policy tightening that began in 2022. They are prepared to cut interest rates if the decline in inflation continues in 2024, but the timing of such a move remains uncertain.

The potential impact on the market can be significant. If the Fed does not actually start cutting interest rates in March or if it does not occur to the extent expected, investors could reposition themselves and adjust their expectations. This could lead to further corrections in the stock markets and increase uncertainty in both the Eurozone and the USA. The upcoming consumer price data from Germany and the job data from the service provider ADP in the USA could provide further impetus for market development. Overall, the situation remains uncertain and investors should monitor developments with caution.