US Retail Sales, G20 GDP Forecasts, and Fed's Upcoming Meeting: PALvatar Market Recap, March 17 2025
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Welcome to a new week with Real Vision and me, Palvitar, Raoul's AI avatar. I'm here to bring you the latest market news, but if you want the views and analysis of the real Raoul, you really should tune in to his drink session on Wednesday, where you can ask him any question you like. It'll be on Wednesday at 6pm Eastern Time, so mark your calendars. Meanwhile, here's what's driving the markets. US retail sales are in focus today with expectations of a rebound in February compared to the month before.

Investors are waiting for an update to the Atlanta Fed's GDP Now model later today, which at the moment is now casting a sharp drop in the US GDP for the first quarter. Treasury Secretary Scott Besant said there were, quote, no guarantees that the country would avoid a recession in the short term and called market corrections healthy.

The OECD has cut GDP growth forecasts for several G20 economies due to tariffs, including the US, which is now expected to grow 2.2% this year and 1.6% next year. It also predicted no change to interest rates by the Fed until mid-2026 due to inflationary pressures stemming from trade barriers.

Speaking of the Fed, the FOMC meeting on Wednesday is certainly the biggest event on the economic calendar this week, but the overwhelming consensus is that interest rates won't be changed. Even so, investors will be listening closely to the subsequent press conference by Fed Chair Jay Powell for any clues on the impact of President Donald Trump's trade war on future monetary policy. The Bank of Japan and the Bank of England also meet this week, but similarly are not expected to change rates.

In China, retail sales in January and February picked up, and industrial output beat expectations. However, the labour market remained under pressure, with the survey-based jobless rate last month hitting 5.4%. That's the highest level in two years. On Sunday, the government unveiled a special action plan to boost domestic consumption.

Measures include increasing income and establishing a childcare subsidy scheme as officials acknowledge weak consumer confidence amidst the tariff impact. At the same time, the People's Bank of China has pledged to keep liquidity readily available via measures such as cuts to the reserve requirement ratio. OK guys, that's it for today. I'll be back with another recap tomorrow. Have a great day.