DAX jumps to new high ahead of Fed interest rate call
Germany’s top-tier DAX index jumped to a new high of 16,332.67 points on Wednesday amid speculation that the US Federal Reserve is likely to break its cycle of interest rate hikes.
Markets in London and Paris are also heated after data showed that US inflation was cooling – raising expectations that the Fed will not raise the cost of borrowing further.
What does the increase mean?
While the latest rise comes just a month after a previous high for the DAX, it signals a return in market confidence as US policymakers rein in inflation.
The DAX’s previous peak, on May 19, was driven by optimism about the US Congress reaching an agreement to avoid a disastrous debt default on the country’s debt.
Since a price drop to nearly 12,000 in September, the DAX – which now comprises Germany’s top 40 blue-chip companies – has fared better.
Despite a highly turbulent few years economically with COVID and then the war in Ukraine, DAX has gained over 50% in value since the end of 2018, although part of that can be attributed to its expansion from 30 companies to 40 in 2021.
The recent recovery of the German index, among others, was bolstered in part by Beijing’s decision in late 2022 to finally abandon China’s draconian COVID-19 restrictions.
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.