European markets closed higher on Monday after starting the new trading week on an uncertain note as investors reassessed the economic outlook.
The pan-European Stoxx 600 closed up 0.5%, with technology stocks adding 2.2% while insurance stocks slipped 0.5%.
Global markets have been pricing in the possibility that the Federal Reserve is preparing to slow the pace of its inflation-fighting rate hikes after last week’s economic data showed declines in wholesale prices and retail sales. .
On Friday, Fed Governor Christopher Waller said he only favored a quarter-point hike on Feb. 1, when the central bank releases its next rate policy update. of interest. Waller also said rates are already high enough to slow the economy.
Kristalina Georgieva, managing director of the IMF, told the World Economic Forum on Friday that the global economic outlook was not as bad as feared a few months ago – “but less bad still does not mean good.”
“We have to be careful,” she told a closing panel at the World Economic Forum in Davos moderated by CNBC.
The Dow Jones opened higher on Monday as investors weighed a potential slowdown, or pause, by the Federal Reserve and braced for a busy earnings week.
Stocks rose in Asia overnight, but most markets in the region are closed for the Lunar New Year holiday, with Shanghai markets closed all week.
