Markets Move Lower after Fed’s Economic Outlook – What’s Next?

Markets are selling the news following the Federal Reserve’s rate decision, with investors reacting bearishly to the central bank’s economic projections. While the Fed held rates steady, its outlook for slower growth and higher inflation has renewed concerns about the impact of tariffs and broader economic uncertainty. Equities struggled in post-Fed trading, and with bond yields edging lower, it’s clear markets are adjusting expectations for future rate cuts. Through the end of the week, investors will be watching initial jobless claims and existing home sales data, along with earnings from key consumer and tech names, to gauge whether the economy remains resilient amid these shifting policy expectations. With geopolitical risks also looming, volatility is likely to remain elevated as markets digest the Fed’s stance

Fed Maintains Rates Amid Growth and Inflation Concerns
The Federal Reserve has kept interest rates steady at 4.25% to 4.50%, citing concerns over slowing economic growth and rising inflation. Revised projections indicate GDP growth at 1.7%, down from 2.1%, and an uptick in inflation to 2.7% from 2.5%, fueling fears of stagflation. ​

President Trump Urges Fed to Cut Rates as Tariff Effects Emerge
Amid escalating trade tensions, President Trump has called on the Federal Reserve to reduce interest rates to counteract the economic impacts of newly imposed tariffs. The administration's aggressive trade policies are starting to affect domestic economic indicators, prompting concerns about sustained growth.

Administration's Stock Market Strategy Raises Eyebrows
The Trump administration's recent maneuvers in the stock market have drawn criticism, with experts cautioning that such strategies could lead to increased volatility and long-term economic repercussions. The approach underscores the delicate balance between political objectives and market stability.​

Surge of Chinese Goods Hits Global Markets Amid Tariffs
New U.S. tariffs have prompted Chinese manufacturers to redirect their products to other international markets, leading to a glut of Chinese goods globally. This shift is disrupting local industries and altering trade dynamics worldwide.​

President Trump Moves to Dissolve Department of Education
In a controversial move, President Trump is set to sign an executive order to dismantle the Department of Education. The administration argues that this will promote localized control over education, though critics fear it could lead to disparities in educational quality across states.​

Markets Rally Following Fed's Steady Rate Decision

U.S. equity markets experienced notable gains on Wednesday after the Federal Reserve announced it would maintain current interest rates and slow the pace of its balance sheet reduction. The S&P 500 rose 1.1%, the Dow Jones Industrial Average added 383 points (0.9%), and the Nasdaq Composite advanced 1.4%. ​

Fed's Economic Projections Signal Rate Cuts and Inflation Uptick

The Federal Reserve's updated projections indicate two quarter-point rate cuts in 2025 and an increase in the core PCE inflation forecast from 2.5% to 2.8%, partly due to tariff impacts. Fed Chair Jerome Powell emphasized that the inflationary effects of tariffs are expected to be transitory. ​

Sector Performance and Global Market Movements

All eleven sectors of the S&P 500 closed higher, with technology, consumer discretionary, and energy leading gains. Overseas, Asian markets presented mixed results, while European markets were mostly higher following a lower-than-expected eurozone inflation reading. ​

Treasury Yields and Commodities

Bond yields declined, with the 10-year Treasury yield settling around 4.25%. Gold prices reached a new record high, closing at $3,040.80 per ounce, as investors sought safe-haven assets amid economic uncertainties.

March 20, 2025

Pre-Market Reports

Post-Market Reports

Asia

Europe 

As the Federal Reserve signals caution amid mixed economic indicators, markets are poised for potential volatility. Investors should remain attentive to upcoming economic data releases and corporate earnings reports to navigate the evolving financial landscape effectively.​