Jerome Powell said officials are not in a rush to lower interest rates, adding the central bank is pausing to see further progress on inflation following a string of rate reductions last year. “We do not need to be in a hurry to adjust our policy stance,” noting that the economy remains strong and interest rates are no longer restraining the economy as much as they had been. The Federal Open Market Committee voted unanimously to keep the federal funds rate in a range of 4.25%-4.5%. The reaction has been tepid, the S&P closing -0.5% and the $ outperforming against all G10 currencies except the JPY.
Today the European Central Bank is widely expected to cut rates by a quarter-point, the deposit facility is presently at 3% with the main refinancing operations rate at 3.15%. The ECB needs growth and this move will continue an aggressive easing cycle, which included four rate cuts in 2024. on the data front we also get Eurozone consumer confidence & unemployment, US GDP, US jobless claims and earnings from Apple and Deutsche Bank earnings.
In other markets, Bitcoin rose 1.4% to $105,208.58, Ether rose 1.5% to $3,188.45, US 10-year Treasuries declined one basis point to 4.52% whilst Japan’s 10-year yield advanced two basis points to 1.210%. Spot gold rose 0.1% to $2,762.60 an ounce and West Texas Intermediate crude was little changed at $73.30 per barrel.
