Energies
The Federal Reserve maintained steady interest rates on Wednesday, forecasting higher inflation and slower growth. The Fed still expects two rate cuts this year. The Federal Open Market Committee kept its key rate at 4.25%-4.5%, unchanged since December, with markets anticipating no changes this week.
Economic forecasts suggest stagflation risks, with GDP growth projected at 1.4% for 2025 and inflation at 3%.
From March, GDP forecasts decreased 0.3 percentage points while PCE increased by the same amount. Core PCE rose to 3.1%, up 0.3 points, and unemployment edged up to 4.5%.
The unemployment outlook saw a small revision, up to 4.5%, or 0.1 percentage point higher than March and 0.3 percentage point above the current level.
Analysts expect the Fed to react to whichever mandate, inflation or employment, shows significant change first, though rate cuts remain more likely than hikes.
China’s CSI 300 fell 0.78%, Japan’s Nikkei 225 lost 0.8%, Topix declined 0.52%, and South Korea’s Kospi dipped 0.15%. Australia’s S&P/ASX 200 was flat.
U.S. markets closed yesterday mixed: Dow fell 0.10% to 42,172, S&P 500 dropped 0.03% to 5,981 while Nasdaq Composite rose 0.13% to 19,547
In the Forex market, the US dollar saw gains yesterday following Powell’s press conference. The dollar index rose 0.5% and broke above 99.00. EURUSD fell more than 60 points to 1.1450
Gold prices continue to decline as the precious metal has lost 2.33% so far this week, while silver maintains its strength around $37 levels.
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