Financial expert warns against exaggerated hopes of early interest rate cuts - markets are becoming more cautious.

Financial expert warns against exaggerated hopes of early interest rate cuts - markets are becoming more cautious.

According to a report by www.n-tv.de, the hope of an early interest rate cut is fading. Bets on rapidly falling interest rates are becoming more cautious, as the probability of a rate cut by the US Federal Reserve in March is now only 85 percent, compared to 100 percent at the turn of the year. With regard to the ECB, there is only a 59 percent probability of a March interest rate cut, after 71 percent last week. This decline in expectations is due to the noticeable decline in inflation in the US and the EU. The inflation rate of two percent that the central banks are aiming for is now more within reach, which is why interest rate cut fantasies are taking off on the financial markets. However, central bankers warn not to exaggerate this speculation.

Reduced expectations of interest rate cuts by the Fed and ECB could impact financial markets in the coming months. Falling interest rate expectations often lead to a rise in stock prices, as lower interest rates increase the attractiveness of stocks compared to fixed income securities. At the same time, lower interest rate expectations could stimulate lending and investment in the economy, which could have a positive impact on economic growth. However, investors and market participants must be careful not to exaggerate interest rate cut fantasies, as this can lead to increased volatility and uncertainty in the markets. It remains to be seen how central banks will react to current economic developments and whether expectations of interest rate cuts will continue to reduce or stabilize.