European stocks declined during trading on Wednesday, as global investors awaited the Federal Reserve's decision on interest rates.
The pan-European STOXX 600 index fell 0.2% to 576.49 points, Germany's DAX index dropped 0.2% to 24,106.01 points, France's CAC 40 index declined 0.2% to 8,031.21 points, and Britain's FTSE index was unchanged at 9,639.08 points.
Global markets are awaiting the results of the Federal Reserve’s final meeting of the year, scheduled for Wednesday, where the central bank is widely expected to announce a third consecutive quarter-point cut in interest rates, with Fed futures forecasts indicating an 87.6% probability of a rate cut, according to CME’s FedWatch tool.
However, the trend among members of the Federal Open Market Committee, which is responsible for setting interest rates, remains divided; some prefer to cut interest rates to avoid further weakness in the labor market, while others believe that any further cut could exacerbate inflation.
Investors are awaiting a reading of the situation through the statement issued after the meeting and the anticipated press conference of Federal Reserve Chairman Jerome Powell on Wednesday afternoon.
Sentiment in European markets was likely affected this week after US President Donald Trump criticized the region's leaders, describing them as weak in an interview with Politico published on Tuesday.
Trump has a complex relationship with European leaders, appearing to get along well with some—such as British Prime Minister Keir Starmer and Italian Prime Minister Giorgia Meloni—while clashing with others. In the interview, the president criticized a “degenerate Europe” for failing to control immigration or take action on the war in Ukraine, saying, “I think they don’t know what they’re doing,” adding, “Europe doesn’t know what to do.”
These remarks come at a time when European allies are trying to ensure that the continent's voice has a role in negotiations over peace proposals in Ukraine, after Trump questioned in his new national security strategy last week the ability of European countries to remain reliable allies.
