Weekly Market Preview
Friday, 21st of March 2025
This week, traders will follow the UK Consumer Price Index data for February. In January, UK inflation saw a notable increase, with the YoY headline rate reaching 3% and the YoY core inflation (excluding energy and food) rising to 3.7%. However, February’s data is expected to show a decline, with headline inflation forecasted at 2.7% and core inflation at 3.5%. Despite this drop, core CPI remains well above the 2% target, posing a challenge for the Bank of England in easing monetary policy.
At its last meeting, the BoE kept interest rates unchanged, however investors anticipate a 25-basis-point rate cut at its next Monetary Policy Committee meeting in May. Currently, markets have priced in nearly two rate cuts this year of 25 basis points, though a sharper-than-expected decline in inflation could lead to expectations of a third cut.
Attention will also turn to the US Personal Consumption Expenditures Index, the Federal Reserve’s preferred inflation gauge. Forecasts suggest the annual PCE index will rise from 2.5% in January to 2.7% in February, with core PCE expected to increase from 2.6% to 2.8%. Any upside surprise in these figures could delay interest rate cuts, possibly pushing them beyond the June meeting.
The Fed recently left interest rates unchanged and reaffirmed expectations for a 50-basis-point cut this year. It also lowered its 2025 growth forecast from 2.1% to 1.7%, citing the impact of President Trump’s policies, including tariffs and reduced government spending. However, Fed Chair Jerome Powell downplayed these effects, calling them “transitory” and dismissing concerns of an impending recession. Meanwhile, President Trump has pushed for rate cuts, forecasting 2.5% economic growth in 2025.
Monday, 24th of March
Tuesday, 25th of March
Wednesday, 26th of March
Thursday, 27th of March
Friday, 28th of March