Markets Focused on Fed Interest Rate Decision
Global markets are closely watching the Federal Reserve’s interest rate decision. While keeping the policy rate unchanged is expected, President Powell’s statements will be closely monitored.
As US President Donald Trump’s tariffs on important trading partners continue to provoke retaliations, geopolitical risks persist, leading to an increased risk perception. Concerns about the inflationary pressures triggered by Trump’s trade war through tariffs are still present.
The focus of investors has shifted to the interest rate decision that the Fed will announce tonight and the speech that Fed Chairman Powell will make after the decision. While the markets are confident that the Fed will keep the policy rate steady in pricing in the money markets, signals from the policy statement and Powell’s verbal guidance are expected to have an impact on the direction of the markets. The interest rate decision will be announced at 10:00 pm.
CONTACTS IN THE RUSSIA-UKRAINE WAR
On the other hand, contacts between the United States and Russia regarding the cessation of the Russia-Ukraine war have created some optimism, even if limited.
In relation to this, Trump, through his Truth Social account, stated that his telephone conversation with Russian President Putin went very well and was productive. Trump used the phrase, “We agreed immediately on an immediate ceasefire in all energy and infrastructure areas,” in his statement.
FITCH CUTS GROWTH EXPECTATIONS
Furthermore, the international credit rating agency Fitch Ratings reduced its growth outlook for the global economy this year from 2.6% to 2.3% due to the trade war initiated by the United States. Next year’s expectations were also lowered from 2.3% to 2.2%. According to data released in the country, the number of new housing starts commenced in February exceeded market expectations with an increase of 11.2%, while the number of construction permits issued decreased by 1.2% on a monthly basis in February.
Industrial production in the US rose by 0.7% in February, surpassing market expectations.
