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All eyes on Fed rate decision
The Federal Reserve set to make first interest rate decisions since outbreak of trade war.
Gold prices hit a new all-time high, driven by heightened geopolitical tensions and market anticipation of central bank meetings.
The U.S. Federal Reserve is expected to maintain current interest rates in its upcoming policy decision.
Asian markets exhibited mixed performance, with the yen softening after the Bank of Japan maintained its interest rates.
Gold and commodities
Gold prices surged to a record high at $3,045 per ounce, as investors sought safe-haven assets amid escalating geopolitical tensions and uncertainties surrounding upcoming central bank meetings. This significant rise underscores the market's sensitivity to global events and monetary policy expectations.
Currency markets
The Japanese yen weakened slightly following the Bank of Japan's decision to maintain its interest rates at 0.5%, a move that aligns with market expectations. Meanwhile, the U.S. dollar remained relatively stable as investors awaited the Federal Reserve's policy announcement, with widespread anticipation that interest rates will remain unchanged. The euro hovered near a five-month high, bolstered by optimism surrounding Germany's approval of substantial fiscal spending plans aimed at stimulating economic growth.
Upcoming economic events
All eyes are on the Federal Reserve's policy announcement scheduled for today, where the central bank is expected to maintain current interest rates. Investors will closely analyze the accompanying economic projections for insights into the potential impact of recent trade policies and geopolitical developments on economic growth, inflation, and employment. Additionally, the Bank of England is set to release its policy decision tomorrow, with markets anticipating that interest rates will remain unchanged amid ongoing economic assessments
The Federal Reserve is expected to keep interest rates steady at 4.25-4.50% today, with market attention centered on its updated economic projections. These forecasts may offer insight into whether the Fed is factoring in potential trade tensions into its outlook. Another focal point will be the "dot plot," which could indicate whether policymakers still anticipate two rate cuts this year.
Chair Jerome Powell’s press conference remains a key event, as he will need to navigate the Fed’s economic assessment while addressing uncertainties stemming from President Donald Trump’s trade policies. However, with no new details on the scheduled reciprocal tariffs set for April 2, Powell is unlikely to provide definitive guidance. Instead, he is expected to reaffirm the Fed’s stance of being in “no hurry” to cut rates, maintaining a data-driven approach.
Meanwhile, Fed funds futures suggest that June and September remain the most probable timeframes for potential policy easing.
