The Fed gave a signal to the bulls on Wall Street. What about European stock exchanges?

Wall Street indices fluctuated in a narrow range until the FOMC decision, but the rate cut gave an argument for growth and the S&P 500 approached its historic peak, reaching 6,900 points during the session – indicate analysts from the BNP Paribas Bank Brokerage House in a commentary.

The main event of Wednesday was the meeting of the American central bank. The Federal Reserve lowered the Fed funds rate by 25bps to 3.50-3.75%. The movement was as expected.

In 2026 and 2027, the Fed expects one cut each

As emphasized in the statement after the FOMC meeting, uncertainty about the economic outlook remains elevated. The Committee noted the risks to both sides of its dual mandate (maximum employment and 2% inflation in the long term) and acknowledges that employment risks have increased in recent months. The announcement also noted that the scope and timing of additional adjustments to the target range of federal funds rates will depend on the assessment of incoming data, changing prospects and the balance of risks.

The published dotplot chart shows that the current prevailing scenario among decision-makers is only one 25bp rate reduction in 2026. This is the same value as in the case of the September dot-plot chart and one cut less than the market expects. In 2027, the scenario of one cut by 25bp also prevails.

New macroeconomic projections were published along with the decision. December's forecasts do not differ significantly from those published in September. The main change is the slightly lower forecast for next year's PCE inflation than a quarter ago, which in 2026 is expected to be 2.4% (median of forecasts) and not 2.6%. However, this is still more than the 2% target level.

Is it time for price increases also in Europe?

On the Warsaw Stock Exchange, the main indices ended the day with a slight gain. WIG20 increased by 0.36% to 3,021 points. CCC was among the leaders (+3.77%), and CD Projekt was the worst performing (-2.93%). In turn, Wall Street indexes fluctuated in a narrow range until the FOMC decision, but the rate cut gave an argument for growth and the S&P 500 approached its historical peak, reaching 6,900 points during the session.

Today's macroeconomic calendar is relatively empty. Investors can only pay attention to data on applications for unemployment benefits in the US. With the U.S. labor market gaining market attention in recent months, weekly data has now gained more weight. Moreover, markets in Europe will react to yesterday's Fed decision.

Dominik Osowski, Brokerage House of BNP Paribas Bank

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