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US Federal Reserve remains unchanged on interest rate hikes - How does this affect the stock market?
According to a report from finanzmarktwelt.de, the stock markets are in euphoria as the US Federal Reserve is unlikely to raise interest rates further after yesterday's Fed meeting. Although the likelihood of another rate hike was already low and Fed Chairman Powell did not rule out another step yesterday, this decision is seen as positive for the markets. Powell has also made it clear that the Fed is not thinking of lowering interest rates either. Today's move in US stock markets is also being interpreted as a reaction to Apple's upcoming numbers and US jobs data tomorrow. The question, however, is whether this is the new bull market or merely...
US Federal Reserve remains unchanged on interest rate hikes - How does this affect the stock market?
According to a report from finanzmarktwelt.de, the stock markets are in euphoria as the US Federal Reserve is unlikely to raise interest rates further after yesterday's Fed meeting. Although the likelihood of another rate hike was already low and Fed Chairman Powell did not rule out another step yesterday, this decision is seen as positive for the markets. Powell has also made it clear that the Fed is not thinking of lowering interest rates either. Today's move in US stock markets is also being interpreted as a reaction to Apple's upcoming numbers and US jobs data tomorrow. However, the question is whether this is the new bull market or just a bear market rally. Bull market proponents argue that the Federal Reserve is “done” and believe in positive seasonality. However, it remains to be seen whether these assumptions will come true. In addition, the geopolitical risks, particularly a possible entry into the war by Hezbollah, should be taken into account.
According to my analysis, the US Federal Reserve's decision not to raise interest rates further for the time being could have a positive impact on the market. Lower interest rates often stimulate companies' investment activity because they can obtain cheaper loans. This could lead to an increase in corporate profits and thus further boost share prices. Apple's positive quarterly figures could also help increase investor confidence in the technology sector and have a positive impact on market developments.
However, one should also consider the possible consequences of the Federal Reserve's decision on consumers. Lower interest rates may lead to rising real estate prices, which could make it more difficult for consumers to purchase a home. In addition, a continued low interest rate policy could lead to inflation risks as the amount of money in circulation increases. This could ultimately lead to higher prices for consumers.
It remains to be seen how the markets will develop and whether the optimistic expectations of the new bull market will be fulfilled. It is difficult to accurately predict the impact on the market, consumer or industry without further information. It is advisable to closely monitor further developments and also keep an eye on the geopolitical risks.
Source: According to a report from finanzmarktwelt.de
Read the source article at finanzmarktwelt.de