The Federal Reserve will hold its monthly meeting today, March 19, to discuss monetary policy and interest rates, with expectations leaning towards keeping rates unchanged within the range of 4.25% – 4.50%, amid ongoing inflationary pressures and concerns over economic slowdown.
The Fed will announce its decision on interest rates and its quarterly economic projections today at 2:00 PM Washington time (9:00 pm KSA time), followed by a press conference by Chair Jerome Powell, where he will provide insights into future monetary policy.
Analysts told Argaam that the meeting comes amid economic uncertainty, with markets currently ruling out any rate cuts. However, investors will closely monitor Powell’s statements regarding the future of monetary policy, particularly in terms of quantitative tightening and growth projections.
US Economic Outlook: Between Slowdown and Persistent Inflation
Wael Makarem, Senior Market Strategist for MENA Region at Exness, said that the US Fed is expected to keep interest rates unchanged during today’s meeting. This decision is supported by a decline in core inflation to 3.1%—the lowest since 2021—along with a stable unemployment rate of 4.1% and moderate GDP growth projections.
He noted that markets anticipate rate cuts in 2025, with two to three reductions of 25 basis points each. However, the March meeting is unlikely to mark the beginning of these cuts.
Makarem also pointed out that Powell’s recent testimony before Congress reinforced this outlook, as he emphasized that the Fed would not lower rates until there is a tangible improvement in economic data.
Future Trends and the Impact of Quantitative Tightening
Raed Momani, Head of Asset Management at Capital Investments, said that the US central bank will focus on three key factors: economic growth forecasts, inflation levels, and future interest rate trends.
He added that there are signs of downward revisions in growth forecasts and upward adjustments in inflation estimates, which could push the Fed to adopt a more cautious approach.
Momani further highlighted that the current scenario suggests the Fed may face challenges related to stagflation, where economic growth slows while inflation remains high. He noted that markets will also pay close attention to issues such as tariffs and immigration policies, which could influence the Fed’s future outlook.
The Fed might hint at slowing the pace of bond sales, which could ease monetary tightening and impact the yield curve. While the Fed controls short-term interest rates, long-term yields are driven by market forces. If the Fed slows the pace of bond sales, it could provide support to financial markets and reduce pressure on economic growth, Momani added.
The Federal Reserve will hold its monthly meeting today, March 19, to discuss monetary policy and interest rates, with expectations leaning towards keeping rates unchanged within the range of 4.25% – 4.50%, amid ongoing inflationary pressures and concerns over economic slowdown.
The Fed will announce its decision on interest rates and its quarterly economic projections today at 2:00 PM Washington time (9:00 pm KSA time), followed by a press conference by Chair Jerome Powell, where he will provide insights into future monetary policy.
Analysts told Argaam that the meeting comes amid economic uncertainty, with markets currently ruling out any rate cuts. However, investors will closely monitor Powell’s statements regarding the future of monetary policy, particularly in terms of quantitative tightening and growth projections.
US Economic Outlook: Between Slowdown and Persistent Inflation
Wael Makarem, Senior Market Strategist for MENA Region at Exness, said that the US Fed is expected to keep interest rates unchanged during today’s meeting. This decision is supported by a decline in core inflation to 3.1%—the lowest since 2021—along with a stable unemployment rate of 4.1% and moderate GDP growth projections.
He noted that markets anticipate rate cuts in 2025, with two to three reductions of 25 basis points each. However, the March meeting is unlikely to mark the beginning of these cuts.
Makarem also pointed out that Powell’s recent testimony before Congress reinforced this outlook, as he emphasized that the Fed would not lower rates until there is a tangible improvement in economic data.
Future Trends and the Impact of Quantitative Tightening
Raed Momani, Head of Asset Management at Capital Investments, said that the US central bank will focus on three key factors: economic growth forecasts, inflation levels, and future interest rate trends.
He added that there are signs of downward revisions in growth forecasts and upward adjustments in inflation estimates, which could push the Fed to adopt a more cautious approach.
Momani further highlighted that the current scenario suggests the Fed may face challenges related to stagflation, where economic growth slows while inflation remains high. He noted that markets will also pay close attention to issues such as tariffs and immigration policies, which could influence the Fed’s future outlook.
The Fed might hint at slowing the pace of bond sales, which could ease monetary tightening and impact the yield curve. While the Fed controls short-term interest rates, long-term yields are driven by market forces. If the Fed slows the pace of bond sales, it could provide support to financial markets and reduce pressure on economic growth, Momani added.
