How the Fed’s course changes are affecting the markets

Frankfurt There is almost nothing that investors fear more than rising interest rates. But studies by the US investment bank Goldman Sachs and the major British bank Barclays show that stocks have generally developed positively even in such phases. The central banks usually tighten their monetary policy when the economy is booming and companies are making higher profits. This prospect also exists now.

This is good news for the markets. The US stock exchanges have had the weakest start to the year since the financial crisis, after the US Federal Reserve recently sent clear signals that it would raise interest rates in March. Further steps will follow, Fed Chair Jerome Powell signaled. At the same time, he wants to end the central bank’s bond purchases before the end of the year and start reducing its balance sheet.