The US Federal Reserve is currently facing a difficult balancing act. Despite moderate inflation figures, the key interest rate remains unchanged as inflation still exceeds the target value. Analyses see little room for short-term rate cuts, especially due to new import tariffs and a potential devaluation of the US dollar, which could increase inflation risk. Expected rate cuts are now considered overly optimistic. In contrast, the European Central Bank has already lowered its key interest rate several times in response to weaker economic outlooks and decreasing inflation risks. This increases the interest rate differential with the US. New trade tariffs between the US and China are affecting the global economic climate. Experts expect a significant inflationary impulse towards the end of the second quarter of 2025, although a quick resolution could mitigate this impact. Slower growth of about 2% is expected for the US economy if political risks such as tariff increases materialize. Europe’s growth remains below average. Despite macroeconomic uncertainties, the DAX reaches new all-time highs, albeit with high volatility. While investors in Europe hope for monetary easing, geopolitical risks cause caution in riskier investments. The conclusion is that financial markets are mired in divergent monetary policy and political uncertainties due to new trade tariffs. Ongoing inflation risks keep the Fed on hold, while Europe opts for rate cuts. Global growth loses some momentum, while stock markets reach new highs despite turbulence.
14.05.2025