Breaking
March 18, 2025

This week, Fed’s Powell must talk up growth while keeping rate cuts on the table Jai Hamid | usagoldmines.com

Jerome Powell is stepping into a tough spot this week. He has to assure investors that the economy is strong while making it clear that the Federal Reserve is ready to cut interest rates if things start going south.

The timing is brutal. Stocks have been unstable, bond yields are down, and the White House isn’t exactly helping. His message has to be precise—too much confidence and markets panic, too little and the sell-off deepens.

The Fed is expected to keep interest rates steady when officials meet on March 18-19. But traders are betting on three rate cuts this year, starting in June. Economists are calling for two. If Powell signals only two, he’ll need to stress the Fed’s willingness to act fast if the job market shows signs of cracking.

“At the margin, the Fed could make it slightly better or slightly worse,” said James Athey, portfolio manager at Marlborough Investment Management. “But clearly they can’t completely calm markets because the hit to sentiment has come largely from the White House.”

Fed faces pressure as markets react to Trump’s economic policies

Donald Trump has made things worse. The president’s trade war escalated fast, and the market is feeling it. Stocks have been in a free fall for the past month. Treasury yields are dropping. Consumer sentiment is down. The White House hasn’t stepped in to reassure anyone. Instead, Trump said on March 9 that the economy is in a “period of transition.” Treasury Secretary Scott Bessent doubled down, saying the markets are in need of a “detox.” None of that helped investors.

Market volatility is already affecting Fed decisions. The two-year Treasury yield, which reacts the fastest to monetary policy shifts, has dropped nearly 60 basis points since January. It hit 3.83% this month, the lowest level in over five months. The S&P 500 is down 10% from its peak. The VIX, which measures market fear, hit its highest level since August.

That’s the backdrop for Powell this week. He can’t ignore it. “Powell needs to give some sort of a signal that they’re watching it,” said Dominic Konstam, head of macro strategy at Mizuho Securities USA. The Fed doesn’t react to the stock market directly, but it can’t pretend this isn’t happening.

Economic projections coming out this week are expected to show slower growth for 2025 and slightly higher core inflation, which removes food and energy costs. That makes the Fed’s job even harder.

Inflation makes rate cuts complicated

Inflation is still a problem. Consumer prices slowed in February. Producer prices didn’t move at all. But the personal consumption expenditures (PCE) price index, which the Fed watches closely, is still firm. Long-term inflation expectations have now climbed for three straight months, hitting a 30-year high.

That’s why Powell can’t just promise rate cuts. “We’ll hear the message that things are still holding up and that policy is in a good place,” said Sarah House, senior economist at Wells Fargo. She wants clarity on how the Fed is balancing inflation risks against a slowing economy.

Matthew Luzzetti, chief US economist at Deutsche Bank, says the Fed will wait before moving rates. “There’s lots of uncertainty that’s out there,” he said. “They are going to be in a wait-and-see mode.” He doesn’t expect rate cuts this year but acknowledges that the inflation fight isn’t over.

If the economy slows while inflation stays high, most economists expect the Fed to keep rates steady. But they’re also watching Trump’s other policies. Tax cuts and deregulation could push growth and inflation even higher, forcing the Fed to rethink its strategy. Powell and other officials are waiting to see the full impact before making a move.

“Despite elevated levels of uncertainty, the US economy continues to be in a good place,” Powell said earlier this month in New York. “We do not need to be in a hurry and are well positioned to wait for greater clarity.”

Fed’s balance sheet and Trump’s trade war add to uncertainty

Investors are also looking for clues about the Fed’s balance sheet. Officials have been reducing it, a process called quantitative tightening (QT). Minutes from the Fed’s January meeting show that they’ve discussed slowing or pausing QT, especially since lawmakers haven’t reached a deal on the debt ceiling.

“The argument for March is that the Fed has already talked about it,” said Blake Gwinn, head of US rates strategy at RBC Capital Markets. “So why not just do it? They can pause QT and restart it later.”

A Bloomberg News survey shows most economists expect the Fed to keep rates steady through mid-2025, with two cuts in September and December. That’s a shift. Back in December, they expected three cuts starting in March. The change reflects uncertainty around Trump’s trade policies.

The president has threatened tariffs against China, Canada, and Mexico. He’s also changed his stance multiple times, making it impossible for markets to price in risk. Investors don’t know what’s coming next, and that’s creating instability.

“The Fed is in a very tough spot right now, facing a more stagflationary outlook even as core inflation remains well above its medium-term target,” said Scott Anderson, chief US economist at BMO Capital Markets. “Uncertainty around the magnitude, duration, and targets of future tariffs further complicates the monetary policy outlook.”

Most economists don’t expect big changes to the Fed’s post-meeting statement. But some see the possibility of a slowdown in QT. Around 11% predict the Fed will ease up next week. Another 41% think that will happen in the second quarter.

Trump’s policies could force the Fed to act sooner

Looking ahead, the big question is how the Fed will react if inflation stays high while the economy slows. Nearly three-quarters of economists surveyed said they now expect weaker growth in 2025 due to Trump’s policies. Two-thirds now predict higher inflation.

So far, Fed officials haven’t said much about how Trump’s policies will influence their decisions. They remain optimistic about the labor market but acknowledge inflation concerns.

“The costs of being cautious are very, very low,” Powell said this month. “The economy’s fine. It doesn’t need us to do anything, really, and so we can wait and we should wait.”

Most economists believe the Fed will hold rates steady if inflation remains high while growth slows. But if conditions worsen, some expect cuts to come sooner.

“If our downside scenario plays out, the Fed will have to shift to focus on growth risks and could start to cut rates by Q3,” said Kathy Bostjancic, chief economist at Nationwide. She sees the first cut happening in October.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot

 

This articles is written by : Nermeen Nabil Khear Abdelmalak

All rights reserved to : USAGOLDMIES . www.usagoldmines.com

You can Enjoy surfing our website categories and read more content in many fields you may like .

Why USAGoldMines ?

USAGoldMines is a comprehensive website offering the latest in financial, crypto, and technical news. With specialized sections for each category, it provides readers with up-to-date market insights, investment trends, and technological advancements, making it a valuable resource for investors and enthusiasts in the fast-paced financial world.

Recent:

Crypto News | Caution from US investors leaves Coinbase Premium negative Andjela Radmilac | usagoldm...

Solana futures debut on CME as mainstream adoption grows Nellius Irene | usagoldmines.com

Elon Musk appears in an interview with US senator Ted Cruz and Ben Ferguson Shummas Humayun | usagol...

Hedera (HBAR), Shiba Inu (SHIB) Or Mutuum Finance (MUTM): Which Of These Will Make You Rich In 2025?...

Crypto News | Ethereum Foundation reportedly adapting based on community feedback Gino Matos | usago...

Crypto News | Hashdex amends S-1 filing for crypto index ETF to add 7 altcoins – including SOL and X...

Hashdex Seeks SEC Approval to Add Litecoin to Crypto Index ETF Hassan Shittu | usagoldmines.com

Spanish Police ‘Dismantle $32.6M Bitcoin-themed Crypto Pyramid Scam’ Tim Alper | usagoldmines.com

Bitcoin Price Set For Reversal To $130,000 After Forming Major Cup And Handle Support Scott Matherso...

Robinhood Launches Prediction Markets Hub For US Retail Investors Tanzeel Akhtar | usagoldmines.com

TRUMP Coin Set for Collapse to $6 – Buy the Dip? Joel Frank | usagoldmines.com

North Korea Surpasses El Salvador in Bitcoin Holdings, Fueled by Bybit Hack Veronika Rinecker | usag...

Bitcoin Resets With 14% Deleveraging—Here’s What Past Events Led To Keshav Verma | usagoldmines.com

Bitcoin needs ‘deeper-pocketed investors’ to absorb the recent sell pressure from short-term holders...

Crypto News | No Strategic Bitcoin Reserve in South Korea: Report Mandy Williams | usagoldmines.com

Canary Capital adds SUI ETF to its pile of SEC altcoin applications Derek H Andersen | usagoldmines....

Helium Network releases strong Q4 2024 report, returns spotlight to DePIN Hannah Collymore | usagold...

Ripple’s new trademark filing sparks speculation on crypto custody expansion Cryptopolitan News | us...

Former London Fund Manager Details Why Ripple’s XRP Is Not Skyrocketing Despite Adoption From Banks ...

Michael Saylor’s Strategy Makes Smallest-Ever Bitcoin Buy, Adding $10.7 Million Worth Brenda Ngari |...

Missed Ethereum (ETH) & Ripple (XRP)? Mutuum Finance (MUTM) Presale Tempts Investors As Massive ...

Crypto News | StanChart revises Ethereum’s 2025 projection to $4000, warns of ‘value destruction’ ca...

Bitcoin Bulls Poised For Action As Market Flashes Bullish Divergence—Details Christian Encila | usag...

Crypto News | Record DeFi Accumulation on Binance: Whales Amass $32.9M Profit in 21 Days Wayne Jone...

Crypto News | Ripple files trademark for ‘Ripple Custody’ in digital asset expansion drive Oluwapelu...

Crypto News | Ethena Labs and Securitize launch institutional-focused Layer-1 blockchain called Conv...

DeFi dominance returns to levels not seen since the 2021 bull market Hristina Vasileva | usagoldmine...

Binance Coin Shows First Bullish Signs in a Month – How High Can it Go?  Tim Hakki | usagoldmines.co...

Standard Chartered Lowers Ethereum Price Target to $4K, Cites Long-Term Structural Decline Tanzeel A...

China’s Central Bank Pushes for Artificial Intelligence Integration in Digital Finance Hongji Feng |...

UK Hedge Fund That Predicted the Rise of XRP Thinks Emerging Mutuum Finance Is ‘XRP 2.0’ as Presale ...

Here’s How High The XRP Price Would Be If It Flips Ethereum’s Market Cap Scott Matherson | usagoldmi...

Crypto News | BinaryX Hits New ATH After 35% Pump, Could New Altcoin Solaxy Explode Next? Felix Mol...

Crypto News | House of Doge and Dogecoin Foundation Unveil Board-Elect, Advisors and Global Dogecoi...

Crypto News | 100,000,000 ADA: Price Crash Incoming Following Extreme Offloading? Dimitar Dzhondzho...

Crypto News | Rules Over Followers: BYDFi’s Official Response to ExtraVOD’s False Allegations Chain...

Crypto News | ECB official claims Trump’s pro-crypto stance could trigger financial turbulence Assad...

Malaysia warns of rising crypto scams targeting seniors Nellius Irene | usagoldmines.com

Canadian Bitcoin miner Bitfarms gains ‘Stronghold’ in US with merger completion Florence Muchai | us...

Market rally leaves Magnificent 7 behind as S&P 500 gains 35 points Jai Hamid | usagoldmines.com

Mutuum Finance (MUTM), Dogecoin (DOGE) & Cardano (ADA): We Analyze Which Altcoin Is The Best Bet...

Saylor’s Strategy loses Bitcoin market influence, can no longer influence BTC prices Florence Muchai...

Crypto News | Latest Developments in Crypto: Here’s What Happened Dimitar Dzhondzhorov | usagoldmin...

Crypto News | SEC weighs changes to crypto custody rule for investment advisors Gino Matos | usagold...

Canary Capital Files for SUI ETF, SUI token Jump by 8% Mustafa Mulla | usagoldmines.com

Standard Chartered slashes Ethereum (ETH) price prediction for 2025 from $10K to $4K Hristina Vasile...

Trump advisor Kevin Hassett cautions of more market uncertainty over Trump tariffs Collins J. Okoth ...

Weak US dollar complicates who bears the cost of Trump’s tariffs Jai Hamid | usagoldmines.com

World Network Partners With Global Gaming Brand Razer, Reveals New Proof-of-Human Tech Sead Fadilpaš...

Crypto ETPs Record $1.7 Billion Sell-Offs: CoinShares Jimmy Aki | usagoldmines.com

Aave V3 is Now Live on Celo Sead Fadilpašić | usagoldmines.com

Ripple (XRP) Price Set To Tumble As Much As 30% In March As Mutuum Finance (MUTM) is Expected To 10x...

Shiba Inu Gains Momentum: SHIB Price Breaks Above 100-Day Moving Average, What’s Next? Godspower Owi...

Crypto News | 80% Surge for This Cryptocurrency After Binance Listing (Hint: It’s Not PI) Dimitar D...

Ethereum Price Prediction 2025: Standard Chartered’s Shocking Forecast—Is ETH in Trouble? Mustafa Mu...

Markets are preparing for the most volatile day of 2025 yet when Trump talks to Putin tomorrow Jai H...

Putin is allowing some international funds, including Americans, to sell Russian securities Florence...

Miami Beach hosts Future Proof Citywide, focuses on AI, crypto, and market swings Jai Hamid | usagol...

‘Not every agent needs its own token’ – Binance’s CZ shares unpopular opinion Hannah Collymore | usa...

Wemix Initiates Buyback and Chainlink Integration Following $6.2M Crypto Hack Veronika Rinecker | us...

Bitfarms Acquires Stronghold Digital, Securing 1.1GW Expansion in Pennsylvania Ruholamin Haqshanas |...

Malaysia Warns of Rising Crypto Investment Scams Targeting Professionals and Seniors Hassan Shittu |...

French Central Bank Governor Raises Concern About Trump’s Pro-Crypto Policies Jimmy Aki | usagoldmin...

Robinhood challenges Polymarket with new regulated prediction markets hub Cryptopolitan News | usago...

Telegram CEO Pavel Durov finally returns to Dubai after France eases restrictions Jai Hamid | usagol...

Solana Holds Bullish Pattern – Expert Sets $140 Target Sebastian Villafuerte | usagoldmines.com

Crypto News | Telegram defends record on crime as CEO returns to Dubai after arrest Oluwapelumi Adej...

Whale outlasts Hyperliquid BTC defenders in $449 million leverage tussle Hristina Vasileva | usagold...

Former US Trade Rep. Ron Kirk says Trump tariff policies are “perceived defenses than a strategy” Fl...

US SEC sees unprecedented vengeance from the crypto community Florence Muchai | usagoldmines.com

Binance announces 0% trading fees on Binance Wallet until September Jai Hamid | usagoldmines.com

Can This Expert Be Right About Cardano (ADA) & Dogecoin (DOGE) Crashes In 2025 & Why Is Ever...

[Satire] Artificial Intelligence Expert Reveals That No One Knows What AI Agents Actually Do Kai Sed...

Crypto News | BitMEX Announces a 345,000 USDT Prize Pool for New and Existing Traders to Win in Mar...

Crypto News | Gold Hits $3K: Why It’s Thriving While Bitcoin Takes a Hit Wayne Jones | usagoldmines...

Crypto News | Strategy increases Bitcoin holdings to 499,226 BTC with small $10.7 million purchase O...

Crypto News | Robinhood leverages Kalshi to expand trading offerings adding prediction markets Oluwa...

Vitalik: An Ethereum Story to Launch Globally on April 15th Victor | usagoldmines.com

Rep. Donalds Introduces Bill to Protect Trump’s Bitcoin Reserve Victor | usagoldmines.com

US Money Supply Soars: What It Means for Crypto? Victor | usagoldmines.com

Binance Introduces Zero-Fee Trading on Binance Wallet Victor | usagoldmines.com

President Trump says he will impose both reciprocal tariffs and additional sectoral tariffs on April...

OECD says Trump’s tariff hikes will hurt global economy, drive inflation much higher Jai Hamid | usa...

Foreign investors lured to high-yielding Chinese bank debt Florence Muchai | usagoldmines.com

Goldman Sachs and central banks witness high demand and purchase of gold, ditching BTC Florence Much...

Ripple’s SEC case now has 2 expected outcomes, with big ramifications for crypto Florence Muchai | u...

Pro-XRP Lawyer Seeks To Expose SEC After Elon Musk’s DOGE Scrutiny Aliyu Pokima | usagoldmines.com

Solana (SOL) and Ethereum (ETH) Price Prediction For March: What Is This New Trending Craze Mutuum F...

Coin Terminal Ups the Level for Regular Investors to Gain as Much as the Large Investment Funds Cryp...

Solana Price To Drop To Double Digits? Major Levels To Watch For Entries Scott Matherson | usagoldmi...

Capital.com Sells Currency.com to Investors Led by CXNEST After 18-Month Deal Ruholamin Haqshanas | ...

Pi Network to $5.55? Analysts Say This Key Catalyst Could Send It Soaring Simon Chandler | usagoldmi...

Is XRP About to Flip Ethereum? 5-Year High Signals Historic Shift Alejandro Arrieche | usagoldmines....

Can Pepe Really 5x in 6 Weeks? Analyst Calls for a Monumental Rally Simon Chandler | usagoldmines.co...

Bitcoin ETFs Face Longest Outflow Streak, Losing $6.4B Over Five Weeks Amid Trump’s Tariff Policies ...

Brazil Introduces Legislation to Allow Partial Salary Payments in Bitcoin Joel Osei | usagoldmines.c...

Aave Confirms No New Token for Horizon, Only $AAVE Hassan Shittu | usagoldmines.com

130,000 Ethereum Moved Off Exchanges – Bullish Signal? Sebastian Villafuerte | usagoldmines.com

Home of The Best Meme Coins, Solana, Turns Five newsbtc | usagoldmines.com

Crypto News | Running Out of Steam? Strategy Makes its Smallest BTC Purchase in Months Jordan Lyanc...

Leave a Reply