New dollar interest rate decision: ‘Economy appears to be much stronger than Fed thought’

The stock markets in Europe may be at a standstill due to Labor Day, but in America the financial world continues to work as usual. Eyes are mainly focused on the Fed, which will make a new interest rate decision tonight. Investors assume that this will remain the same, says Koen Bender, director of Mercurius Vermogensbeheer and Pensioenpotje.nl. ‘The economy is far too strong to say now that we are going for a looser policy.’

According to Bender, it is almost certain that the Fed will leave interest rates unchanged, which is due to the strong economy, according to Bender. ‘All the figures that the Fed looks at, such as inflation figures and labor market figures, show that the economy is too strong to implement looser policy now. The Fed wants to keep its foot on the brakes.” A change is now not expected until after the summer.

Also read: Stock markets fear interest rate decision: ‘An impossible split’

According to Bender, the first quarter figures very cautiously show that some companies are affected by the high interest rates. ‘German car manufacturers notice that consumers are starting to postpone their purchases. Please note; Half of the cars are bought with financing and you are already noticing the interest there,” says Bender. He thinks that the effect will slowly become noticeable for investors.

Also read: Quarterly figures from Apple and Fed decision are eye-catchers in the new stock market week