Last week, the major indices on Wall Street reached new record levels after the U.S. central bank lowered interest rates, while most European stock indices experienced a slight decline.
On Wall Street, the Dow Jones index strengthened by 1.05% last week, reaching 46,315 points, while the S&P 500 rose by 1.2% to 6,664 points, and the Nasdaq increased by 2.2% to 22,631 points.
On Wednesday, after a two-day meeting, Fed leaders reduced interest rates by 0.25 percentage points, to a range of 4.0% to 4.25%, as was expected in the market.
New estimates have also been released, indicating that a narrow majority of Fed leaders expect further interest rate cuts twice more by the end of the year.
Fed Chairman Jerome Powell explained at a press conference that the rates were lowered due to weakness in the labor market, but he also warned that inflation remains elevated and is expected to rise further due to the introduction of tariffs.
This has led investors to exercise caution.
– “After Powell’s comments, enthusiasm for a more aggressive rate cut has waned in the market. He warned of weakness in the labor market, but also of inflation. The Fed will need to conduct monetary policy in a delicate balance going forward, supporting the labor market on one hand while reducing inflation on the other,” explains Michael Rosen, director at Angeles Investments.
