Markets bet against central banks – which scenarios are now possible

Frankfurt In the next few days things will happen in quick succession: the US Federal Reserve (Fed) will start what may be its last interest rate hike on Wednesday, and the European Central Bank (ECB) will also tighten monetary policy again a day later. The crucial question is how to proceed afterwards.

The expectations of the markets themselves, which can be read from the data, suggest that investors expect rapid rate cuts later this year. But the monetary politicians want nothing to do with that, and many economists – if not all – agree with them.

The respective interests are obvious. The market participants do not want to lose their optimism. In any case, the monetary policymakers want to avoid the impression that they are not fighting inflation consistently enough. And economists hope their forecasts won’t go too far off the mark. Which scenarios are possible now and what would be the consequences for investors?

Investment opportunities for different scenarios

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