Dax in waiting mode before Fed interest rate decision

Dusseldorf. On Wednesday, everything on the markets will be dominated by monetary policy, this time due to the interest rate decision by the US Federal Reserve (Fed) in the evening. Traditionally, investors hold back from making transactions before such dates in order to be able to react to a possible new market situation afterwards.

This is also reflected in the Dax: In the morning, the leading German index was 25,521 points, slightly higher than the day before.

The Fed's decision has already been made on the markets. Market participants estimate the probability of an interest rate increase of 25 basis points to 3.75 to 4.0 percent to 95 percent. Strong labor market data from the previous week and the still high inflation data from last Friday ensured that expectations solidified.

Nevertheless, bond investors in particular are “extremely nervous,” said Joachim Schallmayer, head of capital markets and strategy at the Sparkasse fund subsidiary Deka. “If the Fed does not act, it would leave behind a great deal of uncertainty, which would lead to further increases in long-term interest rates.”