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Gold
4844.35
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Oil
97.598
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USD/JPY
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Real-time News
The U.S. experienced a net outflow of international capital of $25 billion in January, compared to a revised figure of $113.9 billion in the previous month (originally reported as $44.9 billion).On March 19th, Art Hogan, Chief Market Strategist at B. Riley Wealth, stated that the Feds decision was less hawkish than expected, which was somewhat surprising. As expected, interest rates remained unchanged; more predictably, Governor Milan voted against the decision. Interestingly, they lowered their inflation outlook while raising their economic growth outlook. In the current environment, this might be appropriate, even though they have no data that includes the impact of the Iran war. Even todays PPI data did not take Iran into account. Therefore, this is the closest they can get to "keeping quiet about the outlook," and thats based on the data they already have. We will no longer hear them mention that inflationary pressures are "temporary."On March 19th, Federal Reserve Chairman Jerome Powell stated that generative artificial intelligence tools will certainly have a positive impact on productivity improvements in the coming years. However, he cautioned that whether the impact of AI will lead to a decline in inflation still needs careful assessment. Powell noted that the current boom in AI data center construction in the US is putting upward pressure on the prices of many goods and services, and "may have pushed up inflation to some extent." Powell stated, "In the short term, we are not seeing a situation where we will immediately need to lower interest rates or where inflation will gradually decrease." He added that this is an "evidence-based question"—whether AI will increase supply faster than demand, but over time, it will help improve productivity. Higher productivity allows for sustained income growth, so it is a very beneficial thing.On March 19th, Ameriprise Financials Chief Market Strategist, Anthony Saglimbene, stated that the Federal Reserves policy statement and interest rate decision were in line with expectations, while the summary of economic projections and statement were slightly dovish. He noted that, as he understood it, these economic projections were slightly dovish—although both PCE and core PCE forecasts had risen, the statement still indicated that the economy was in good shape, job growth was moderate, and the unemployment rate was stable.FOMC Statement: 1. Interest Rate Decision: The Fed maintained the federal funds rate at 3.5%-3.75%, holding steady for the second consecutive time; Governor Milan voted against a 25 basis point cut. 2. Interest Rate Outlook: The median dot plot forecast remains unchanged for one rate cut in 2026 and one in 2027, while the median long-term federal funds rate forecast was slightly raised. 3. Inflation Outlook: Inflation remains slightly high. The Fed remains committed to supporting the goal of restoring inflation to 2%. The Fed raised its PCE and core PCE inflation forecasts for the next two years. 4. Economic Outlook: Uncertainty surrounding the economic outlook remains high. The impact of developments in the Middle East on the U.S. economy remains uncertain. The Fed raised its economic forecasts for the next three years. 5. Labor Market: Job growth has remained sluggish in recent months, and the unemployment rate has remained largely unchanged. The Fed maintained its unemployment rate forecast for this year, but raised its forecast for next year to 4.3%. Powells Press Conference: 1. Interest Rate Outlook: The Fed is in a favorable position. Policy rates are at the high end of the neutral range, or slightly tighter. 1. No rate cuts will be made if inflation remains stagnant. While most people dont consider a rate hike a basic expectation, the possibility of it being the next step has indeed been mentioned. No trigger for a rate hike can be given. 2. Inflation Outlook: Rising energy prices will push up overall inflation, but its too early to judge the magnitude. This energy supply shock is a one-off event. Whether energy inflation can be ignored depends on whether commodity inflation can be contained. Slow progress on tariffs affects inflation forecasts. 3. Economic Outlook: The US economy remains strong amidst numerous challenges. Higher GDP forecasts reflect confidence in productivity. Current productivity gains are not due to generative artificial intelligence. Its too early to judge the full economic impact of the Middle East situation. 4. Employment Outlook: The breakeven point for new job creation is clearly low. Multiple indicators show a degree of stability in the job market. There are indeed downside risks to the labor market. 5. Retention: If a new Fed Chair is not confirmed by the end of my term, I will serve as interim Chair. I have no intention of leaving the Board before the Justice Department investigation concludes, and my future plans after the investigation are unclear. 6. Market reaction: From the announcement of the decision to the end of Powells speech, gold fell by $30, the Nasdaq fell by more than 1% from 0.5%, the 2-year Treasury yield rose by about 4 basis points, the US dollar rose by about 20 points, and interest rate futures priced in interest rate cuts for the whole year by about 3.5 basis points to 17 basis points.
