US inflation data influences the stock markets - financial expert analyzes effects on the DAX and key interest rates

US inflation data influences the stock markets - financial expert analyzes effects on the DAX and key interest rates

According to a report by www.finanzen.net, investors in Frankfurt acted more cautiously after important US inflation data on Thursday. The DAX started the session 0.52 percent higher at 16,775.92 points and then fell back. Ultimately, the stock market barometer was 0.86 percent lower at 16,547.03 points in the wake of a weaker Wall Street. The focus in the afternoon was on the US inflation figures, which, along with the US labor market, are crucial for the Fed's further interest rate policy. In line with expectations, there was an increase in consumer prices in the USA in December, although at 3.4 percent it was higher than experts expected.

US inflation and key interest rates move the stock markets

After some aggressive interest rate increases, the Fed has recently left the key interest rate in the range of 5.25 to 5.50 percent three times in a row and could also pause at the end of the month. It is increasingly convinced that inflation can be brought under control and assumes that lower interest rates until the end of 2024 will be appropriate. The hope of rapid interest rate cuts drove the stock markets significantly higher in a pre-Christmas rally.

Bitcoin ETF approval in focus

Investors also keep an eye on the Bitcoin price. The Securities and Exchange Commission (SEC) approved the first U.S.-listed Bitcoin exchange-traded funds (ETFs) on Wednesday.

The increased inflation rate in the US and the expectation of a pause on interest rates by the Fed could lead to short-term uncertainty in the stock markets as investors may expect tighter monetary policy. The approval of Bitcoin ETFs, on the other hand, could boost the price of cryptocurrencies and increase investor interest. However, it remains to be seen how the markets will react in the long term.