Interest rate cuts: What do they mean for the stock market, real estate and savers?

Interest rate cuts: What do they mean for the stock market, real estate and savers?

According to a report by www.br.de, the forecast for 2024 is that interest rates will most likely fall. This development is already having an impact on the stock market, the real estate market and consumers. The markets have already anticipated the interest rate cuts and priced them into current prices. Interest rates have already fallen for home builders and consumers, which has a positive impact on financing options. But for savers it could mean that the days of high interest rates on investments will soon be over.

Impatiently waiting for interest rate cuts from the Fed and ECB

The forecast interest rate cuts are already having an impact on the markets as they are expected by market participants. The European Central Bank (ECB) could loosen its monetary policy as early as spring to take into account lower inflation in the euro area.

Interest rates for consumers and home builders have already fallen

The experts from Dr. Klein report that the prices for construction financing fell significantly in November. Cheap loan interest rates were between 3.69 percent and 4.23 percent - depending on the terms.

Crumbling interest rates on savings, but falling inflation rates even further

For savers, the forecasts are still stable for the time being, as an interest rate of 4.0 percent on fixed-term deposits should still be possible at the end of 2023 and in the first two quarters of 2024. Low inflation and high interest rates suggest that the economy is somewhat paralyzed at the moment, especially in Germany.

Lower interest rates are particularly important for Germany

The weak German economy and the threat of recession could prompt the ECB to quickly ease its monetary policy in order to enable a “soft landing” for the economy.

Deutsche Bank expects interest rate cuts to follow quickly

Deutsche Bank predicts that the ECB could cut interest rates on the euro as early as April 2024, rather than later in the year.

Interest rate cuts could be “earlier, faster, further, clearer”.

It is even being discussed that there could be interest rate cuts as early as March, which would push the key interest rate 1.5 percent below the current level.

Strong impact on assets such as stocks and real estate

The lower interest rates can have a strong impact on assets such as stocks and real estate. A standstill in housing construction also has consequences for economic growth and employment.

The forecast interest rate cuts are already having an impact on the markets and the economy and could contribute to a recovery of the German economy in the future.