ChainCatcher message, Federal Reserve Chairman Powell: We are at a stage where we can either cut interest rates or maintain the current clearly tight policy stance.

ChainCatcher news, renowned Federal Reserve watcher and Chief Economist at Nationwide, Cathy Bostianchich, warns that caution is needed regarding bets on Federal Reserve rate cuts.She believes that investors are too eager to digest the impact of rate cuts, as concerns about a sharp economic slowdown grow, and they generally expect the Fed's protective policies (Fed put) to provide a buffer for economic activity. Even assuming that economic activity does not decline sharply, high persistent inflation, along with inflationary pressures from tariffs, may keep the Federal Reserve on the sidelines for a longer period than the market expects.

ChainCatcher news, Matthias Scheiber, head of Allspring's Global Multi-Asset Solutions team, stated that in light of growing concerns about tariffs and their potential impact on U.S. economic growth and inflation, the Federal Reserve has adopted a widely expected 'wait-and-see' approach to interest rates. We believe that the next possible window for the Fed to cut rates will be in May or later, and some market analysts now expect three rate cuts in 2025, instead of the two cuts anticipated a month ago.The interest rate market currently expects the Fed to lower rates to around 3.75% by the end of the year. This largely depends on how the balance between inflation and growth tilts, as the economy may continue to weaken, and the Fed may need to cut rates more aggressively than expected.

ChainCatcher message, futures data shows that traders believe the probability of the Federal Reserve resuming interest rate cuts at the June meeting is 62.1%, while this probability was 57% before the Federal Reserve made its decision.

ChainCatcher message, the Federal Reserve's dot plot shows that among 19 officials, 4 officials believe there should be no rate cuts in 2025 (1 in December), 4 officials believe there should be a cumulative rate cut of 25 basis points in 2025, which means 1 rate cut (3 in December), 9 officials believe there should be a cumulative rate cut of 50 basis points in 2025, which means 2 rate cuts (10 in December), 2 officials believe there should be a cumulative rate cut of 75 basis points in 2025, which means 3 rate cuts (3 in December), no officials believe there should be a cumulative rate cut of 100 basis points in 2025 (1 in December), and no officials believe there should be a cumulative rate cut of 125 basis points in 2025 (1 in December).

According to ChainCatcher news, based on CME's "FedWatch" data, the Federal Reserve will announce its interest rate decision tonight (March 20, 2 AM Beijing time). The probability of a 25 basis point rate cut in March is only 1%, while the probability of maintaining the current rate is 99%.The probability of a cumulative 50 basis point rate cut by May is 0.2%, the probability of a cumulative 25 basis point rate cut is 18.6%, and the probability of maintaining the current rate is 81.2%.

ChainCatcher news, Fitch stated in its latest global economic outlook that it expects global economic growth to slow to 2.3% this year, well below trend levels and lower than the 2.9% forecast for 2024. At the same time, Fitch has downgraded its U.S. economic growth forecast from 2.1% in December last year to 1.7%, and reduced the 2026 growth forecast from 1.7% to 1.5%.Fitch indicated that the increase in tariffs will lead to higher consumer prices in the U.S., lower real wages, and increased business costs, while the surge in policy uncertainty will impact business investment. It is estimated that the tariff shock will cause U.S. inflation to rise by 1% in the near term, and it believes that the Federal Reserve will delay further easing of policy until the fourth quarter of 2025. It now expects the Fed to only cut rates once this year, but with the economic slowdown and stabilization of tariff levels, it anticipates three more rate cuts in 2026.

ChainCatcher news, according to Jinshi, Lazard's Chief Market Strategist Temple said that due to inflation risks, Lazard still expects the Federal Reserve will not cut interest rates in 2025.He stated that Lazard's view significantly differs from the market consensus, which generally anticipates three rate cuts this year. Temple said, "My view is not in line with the consensus because I expect that by 2025, U.S. tariffs will expand in scope and scale, driving up inflation."He mentioned that a renewed acceleration of inflation may not necessarily lead to rate hikes, but rising price pressures could prevent the Federal Reserve from easing policy in the face of rising unemployment.

ChainCatcher news, according to Jinshi reports, Bastian Freitag, head of the German fixed income department at Rothschild Wealth Management, stated that the Federal Reserve is expected to remain on hold this week, with the earliest window for the next rate cut in June.In a report, Freitag noted that inflation continues to stagnate above the Federal Reserve's 2% target, and this sideways trend may persist. The punitive tariffs already imposed by the U.S. government and those that will still be imposed may continue to elevate prices. "Meanwhile, we have observed an increase in survey-based inflation expectations, which reduces the Fed's room for premature rate cuts," Freitag said. He expects the Federal Reserve to cut rates in June, September, and the first quarter of 2026.

ChainCatcher news, institutional surveys show that interviewed analysts expect the European Central Bank to cut interest rates two more times this year, and no longer anticipate that the bank's rates will fall below 2%.The monthly survey indicates that after six rate cuts so far, the European Central Bank is still likely to cut rates consecutively in April and June. However, unlike the previous survey, respondents expect the deposit rate (currently at 2.5%) to remain at 2% before the end of the survey period. In mid-February, a slight majority had anticipated that rates would eventually drop to 1.75% by March 2026. Governments across Europe plan to significantly increase defense investments, which could boost sluggish economic growth and exacerbate inflation.In addition to military spending, Germany also intends to increase spending by several hundred billion euros to renovate its aging infrastructure. Deutsche Bank economist Marco Wagner stated that this spending "will increase inflationary pressure by the end of 2026."

ChainCatcher news, according to Jinshi reports, the Federal Reserve is expected to keep the policy interest rate unchanged this week, but Barclays economists warn that the impact of tariff shocks may be more severe than indicated in the FOMC's Summary of Economic Projections (SEP). They stated in a research report: "We believe that the risks this year tend to delay interest rate cuts." Barclays expects the Fed's SEP to show rising inflation and unemployment rate expectations, along with a decline in GDP growth rate, but Barclays economists anticipate that the extent of GDP slowdown and inflation increase will be greater than indicated in the SEP. They added: "Although we expect the SEP to show that the benchmark interest rate will be lowered once this year, we still believe that the committee will ultimately cut rates twice this year in June and September, each by 25 basis points."

ChainCatcher news, according to Jinshi reports, Deutsche Bank's research department expects that the Bank of England will cut interest rates four more times in 2025, bringing the rate down to 3.50%.However, the bank's economist Sanjay Raja stated in a report that the Bank of England is likely to keep the interest rate unchanged at 4.50% in its next decision on March 20.Raja said, "In our view, a 'gradual and cautious' approach is not conducive to consecutive rate cuts—especially in the context of rising overall CPI."LSEG data shows that the market expects a 92% probability that the Bank of England will keep interest rates unchanged in March, and that the Bank of England will cut rates two more times in 2025.

ChainCatcher news, according to Jin10 data reports, multiple Wall Street economists have stated that policymakers are unlikely to feel overly reassured by these numbers due to the complex calculations behind the data and trends in key areas.Bank of America economist Stephen Juneau stated in a report, "In short, the inflation process for 2025 is off to a rocky start, and our forecast for the Personal Consumption Expenditures (PCE) inflation further confirms our view that inflation is unlikely to fall to a level that would prompt the Federal Reserve to cut rates this year, especially in the context of policy changes pushing inflation higher. Unless economic activity data weakens significantly, we believe the policy rate will remain unchanged by the end of the year."Although the Federal Reserve also pays attention to CPI and PPI, it believes that the final say on inflation belongs to the PCE price index. Most economists expect that the latest PCE data, to be released later this month, will show that the year-on-year inflation rate is at best stable at 2.6%, and may even rise slightly, further distancing itself from the Federal Reserve's 2% target.

ChainCatcher news, according to Jinshi reports, U.S. short-term interest rate futures still indicate that the Federal Reserve will cut interest rates in June after the release of initial jobless claims and PPI data.

ChainCatcher news, according to Jinshi reports, Barclays' latest forecast shows that the Federal Reserve may cut interest rates by 25 basis points in June and September this year, a revision from the previous expectation of only one rate cut in June. This change may reflect the market's further consideration of inflation and slowing economic growth.

ChainCatcher news, according to Jinshi reports, Paul Eitelman, Chief Investment Strategist for North America at Russell Investments, stated that due to the robust U.S. economy, the next interest rate cut by the Federal Reserve is unlikely to occur before May or June."We believe that the U.S. economic fundamentals are solid amid extreme uncertainty in policies faced by households, businesses, investors, and the Federal Reserve." Federal Reserve Chairman Powell has clearly indicated that he will wait for more clear information before cutting rates again, "which sets the stage for the next rate cut in May or June." Eitelman noted that macro fundamentals show resilient economic growth and easing inflation, supporting the baseline scenario of two to three rate cuts later this year.

ChainCatcher news, CICC's research report states that the U.S. core and total CPI inflation both fell in February, both below market expectations.From a breakdown perspective, oil prices and airfare prices have significantly cooled, reflecting weakened economic demand. Overall, rent remains moderate, and the increase in core commodity prices has slowed. Looking ahead, CICC believes that the slowdown in demand is conducive to curbing inflation, and the real estate and labor markets may not become sources of inflation by 2025. However, tariffs may push up short-term price levels, enhancing the stickiness of inflation. The Federal Reserve will not rush to cut interest rates and will wait for clarity on tariff policies before taking action. CICC maintains its previous judgment that the next rate cut may have to wait until the third quarter.

ChainCatcher message, according to CME's "Fed Watch" data, the probability of the Federal Reserve cutting rates by 25 basis points in March is 2%, while the probability of maintaining the current rate is 98%.