FOMC Economic projections support multiple reductions of FED rate
On March 19, the Fed enforced interest rates at 4.5%, tailored to market expectations. The FOMC -economic projections, however, illuminated the concern about a more ragged Fed Fed Rate Stance as a result of American rates. Most important revisions included:
- PCE inflation: increased from 2.5% to 2.7%.
- Unemployment percentage: Reviewed from 4.3% to 4.4%
- 2025 GDP growth: reduced from 2.1% to 1.7%.
- 2025 FED interest rate: unchanged at 3.9%.
The FED tariff paths suggested a stronger focus on economic growth rather than price stability, the patting of recession fears.
Asian market implications: Wednesday’s American market profits on the FED Tariefpad Outlook set the tone for the Asian session on Thursday 20 March.
People’s Bank of China leaves the rates stable
On March 20, the People’s Bank of China maintained the prime rates of one year and five years (LPR) at 3.1% and 3.6% respectively. Thursday’s decision to maintain the rates came despite the recent promise of the PBOC to lower the interest rates when needed, which influenced the investor sentiment.
In particular, the handle of the PBOC and the lack of fresh stimulus measures from Beijing have probably activated the profitable, so that the profit of Wall Street was overshadowed.