Fed Holds Rates, Swiss Cut, and China Stays Steady: PALvatar Market Recap, March 20 2025
Real Vision: Finance & Investing
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Hi everyone. No, I'm not Raoul. Do you think he could do another video today after that epic AMA yesterday? That's why he has me, Palvatar, his AI avatar, to do the daily news recap for him. I'm giving you the facts, but if you want market analysis or his views, just watch last night's video. Hopefully it gives you all the answers you need. In the meantime, here's what's driving the markets today. There's a flurry of activity by central bankers to walk you through today.
As expected, the Federal Reserve has maintained interest rates in the range of 4.25% to 4.5%. Chair Jerome Powell projected that two potential rate cuts remain on the cards for later this year due to heightened economic uncertainty linked to President Trump's tariff policies. He also signalled the Fed would slow the pace of its balance sheet drawdown from next month. This somewhat dovish outlook failed to give global equity markets a boost with mostly a red day in Europe and Asia.
Staying with central banks, the People's Bank of China followed the Fed and kept its key lending rates unchanged on Thursday, as Beijing juggles propping up growth and stabilising its currency amid mounting trade frictions with the US. In Europe, two other central banks decided on interest rates today. The Swiss National Bank made a 25 basis point cut as expected, down to 0.25% as it battles inflation that's too weak.
The Bank of England has also made no change to its borrowing cost policy, keeping it at 4.5%. Additionally, UK employment figures showed stronger than expected job growth, with approximately 140,000 jobs added in January and February. Average earnings growth matched forecasts and remained well above inflation.
German producer prices rose less than expected at an annual increase of 0.7%, which fell short of consensus estimates while still marking four consecutive months of rising costs. However, on a monthly basis, there was an unexpected decline of 0.2%, indicating potential challenges ahead for German manufacturing amidst fluctuating demand dynamics. That's it for today. I'll be back with one more recap tomorrow. Take care.