ChainCatcher news, Federal Reserve Chairman Powell: It remains to be seen how uncertainty will affect the economic outlook.

ChainCatcher news, according to Jinshi reports, Federal Reserve Chairman Powell faces a tricky task this week, needing to assure investors that the economic fundamentals remain solid while also conveying that policymakers are ready to intervene if necessary during Thursday's interest rate decision. As Powell praises the resilience of the U.S. economy, it coincides with Trump rapidly escalating the trade war, causing unease and leading to a significant decline in U.S. stocks over the past month. With growing concerns about the economic outlook, consumer confidence is declining, and bond yields are also falling. Dominic Konstam, head of U.S. macro strategy at Mizuho Securities, stated, "Powell needs to send some signal that they are paying attention to the stock market. Officials cannot ignore the recent declines."Economists widely expect the Federal Reserve to cut rates twice this year. Some investors warn that if officials continue to signal only two rate cuts by 2025, it becomes even more necessary for the Fed chairman to emphasize that the Fed is willing to adjust borrowing costs if there are issues in the labor market. James Ace, a portfolio manager at Marlborough Investment Management, said, "The Fed may marginally improve or worsen the situation. But clearly, they cannot fully reassure the market, as the blow to market sentiment mainly comes from the White House." Aside from issuing escalating and changing tariff threats to trading partners, the Trump administration has not taken many measures to mitigate the risk of economic recession.

ChainCatcher news, according to Jinshi reports, several important economic data will be released next week, among which the U.S. February CPI data is the most anticipated by the market. On Wednesday, the U.S. February unadjusted CPI year-on-year rate, seasonally adjusted CPI month-on-month rate, seasonally adjusted core CPI month-on-month rate, and unadjusted core CPI year-on-year rate will be announced. These data will directly impact the Federal Reserve's policy decisions at the meeting on March 18-19.In addition, this week there will also be important events such as U.S. President Trump meeting with American tech leaders, including executives from HP, Intel, IBM, and Qualcomm, as well as the Bank of Canada's interest rate decision and a speech by European Central Bank President Lagarde.

ChainCatcher news, according to Caixin, Federal Reserve's Bostic stated that confidence in the economic outlook for 2025 has decreased. It is difficult to incorporate all potential policy changes into the economic outlook; unexpected inflation developments are not expected to follow a linear trajectory.The Federal Reserve did not significantly cut interest rates last year, and the policy remains somewhat restrictive; there is satisfaction with pausing rate cuts to observe economic developments. The Federal Reserve is approaching the threshold level of its balance sheet, with the debt ceiling being a factor in determining this; there is a desire to regularly monitor the balance sheet to ensure that asset shrinkage does not become excessive.

ChainCatcher news, UBS Group's chief economist Arend Kapteyn stated that tariffs are the biggest risk facing the global economic outlook. UBS predicts that global economic growth will slow from about 3.2% in 2024 to 2.9% this year. If Trump continues to implement the tariff policies he proposed during his campaign, it could bring "the level of trade restrictions in the U.S. back to levels we haven't seen since the mid-1930s." He added, "If these tariffs are really imposed, there could be a lot of additional downside risks to our forecasts." However, Kapteyn is skeptical about whether global tariffs will be implemented, as it is legally complicated.

ChainCatcher news, the South Korean Finance Minister stated that the economic outlook has been inevitably downgraded this year and that severe measures will be taken against any drastic foreign exchange fluctuations. (Jin Ten)

ChainCatcher news, this week, the Federal Reserve finally confirmed the long-anticipated "pivot" by the market. The central bank's statement and update on economic forecasts this week had a significant impact on the market. Market participants currently expect the Federal Reserve to cut interest rates by about 40 basis points by December 2025, leading to a rise in U.S. Treasury yields. Earlier this week, Bitcoin fell from its historical high, and on Friday during the European session, Bitcoin continued its downward trend, approaching $95,000 at one point. Earlier, Bitcoin had just set a new historical high of over $108,000, and this round of decline in the crypto market has had a greater impact on altcoins such as Ethereum and Dogecoin.Additionally, U.S. exchange-traded funds (ETFs) that directly invest in Bitcoin also ended a 15-day streak of inflows this week, recording an outflow of $680 million, highlighting the shift in market sentiment.

ChainCatcher news, according to Jinshi reports, Citigroup's economist team elaborated on their views for 2025, expecting that companies will shift from reducing hiring to outright layoffs. This, in turn, will lead to a decline in consumer spending and business investment. They stated that even if their view on layoffs is incorrect, the slowdown in income growth that comes with the hiring slowdown still poses risks to spending. A loose labor market will alleviate inflationary pressures in the service sector, while weak global conditions will suppress commodity prices.They indicated that this will lead the Federal Reserve to take aggressive actions, expecting a 25 basis point rate cut at every meeting until July next year, bringing the federal funds rate down to between 3% and 3.25%. Meanwhile, market expectations anticipate that the federal funds rate will reach around 4% by then.Economists noted that if long-term interest rates decline, it will help the severely impacted real estate and manufacturing sectors, but the effect will not be significant. They stated, "If the labor market develops as we expect, with the unemployment rate about to rise sharply, then the weakness in consumer health will offset any demand boost from lower interest rates."

ChainCatcher message, Federal Reserve Governor Cook stated that the scale and timing of interest rate cuts will depend on the upcoming data, economic outlook, and the balance of risks; the policy is not predetermined. The interest rate cuts so far are an important step in easing policy restrictions.

ChainCatcher message, Federal Reserve Chairman Powell: For December, we will focus on the upcoming data and how this data will affect the economic outlook.

ChainCatcher news, Moody's analyst Stefan Angrick stated that the Bank of Japan's economic outlook is relatively hawkish. The forecasts for economic growth and inflation indicate that the bank is still likely to raise interest rates in the near future. Aside from a slight upward revision of the growth forecast for fiscal year 2025 and a slight downward revision of the inflation forecast, these predictions have changed little.Angrick stated, "The Bank of Japan believes that the Japanese economy has moderately recovered, with growth above the potential growth rate." He added that the Bank of Japan indicated that consumption is on a "moderate growth trend," which differs from the "resilience" wording used in July. He noted that these cautiously optimistic assessments contradict the poor data from the past year. "The Japanese economy is stagnating, and evidence of demand-driven price pressures remains scant."

ChainCatcher News: The Bank of Japan has maintained its policy interest rate unchanged, in line with market expectations, while reiterating its commitment to achieving stable inflation and economic growth.Most observers of the Bank of Japan were not surprised by Thursday's decision, as the central bank's governor had expressed increasing concerns about the uncertain global economic outlook well in advance. He also indicated that the Bank of Japan has time to analyze risk factors, suggesting that the bank will continue to act cautiously.In the quarterly outlook released on Thursday, the Bank of Japan stated that it expects inflation to remain around the 2% target in the coming years. This closely watched report will bolster expectations that policymakers will soon raise interest rates again. (Jin Shi)

ChainCatcher news, according to Bitcoin.com, JPMorgan CEO Jamie Dimon expressed a cautious outlook on the economic prospects during the company's Q3 2024 earnings call. He emphasized concerns about global instability: "We have been closely monitoring the geopolitical situation for some time, and recent events indicate that the situation is very dangerous and is worsening."He added, "Humanity is suffering greatly, and the consequences of these situations could have profound impacts on short-term economic outcomes, and more importantly, on the course of history." He stressed that as geopolitical tensions escalate, widespread chaos may occur, warning that this could have serious repercussions for global markets.Dimon also discussed issues facing the U.S. economy. He acknowledged that while inflation is cooling and the U.S. economy remains strong, some potential risks still exist. He stated, "Several key issues remain, including massive fiscal deficits, infrastructure needs, trade structural adjustments, and global remilitarization."He emphasized the necessity of staying vigilant and urged preparedness for unpredictable economic changes. "While we hold out the best hopes, these events and the pervasive uncertainty indicate why we must be prepared for any environment," he concluded.

ChainCatcher news, according to Jinshi reports, Federal Reserve's Logan stated that the economic outlook still has "significant uncertainty," supporting the decision for the Federal Reserve to lower interest rates in September. There are notable risks that inflation may remain significantly above 2%, leaning towards a "more gradual path" back to normal interest rate levels.

ChainCatcher news, Federal Reserve Chairman Powell did not discuss monetary policy or economic outlook in his brief opening remarks at the New York Fed. (Jin Shi)

ChainCatcher news, Peter Cardillo, chief market economist at Spartan Capital Securities, stated that he originally expected the Federal Reserve to gradually cut interest rates by 25 basis points, but the Fed's actions have been "much more generous" than he anticipated, especially as they have already hinted at a possible additional cut of 50 basis points before the end of the year.Cardillo believes that the Fed's move is clearly dovish, mainly due to concerns about a weak labor market. Although the news initially prompted a positive reaction in the U.S. stock market, Cardillo pointed out that market sentiment may change in the coming days, and investors might start to worry about the economic outlook.

ChainCatcher news, Federal Reserve Chairman Powell will deliver a speech on the economic outlook at the Jackson Hole Economic Symposium at 10 AM Eastern Time on August 23 (10 PM Beijing Time on August 23), setting the tone for the interest rate cut window in September.This is the first full day of the annual economic symposium held by the Kansas City Fed in Jackson Hole, Wyoming. This global central bank annual meeting provides Powell with an opportunity to make the latest assessment of the trajectory of the U.S. economy and the outlook for monetary policy between the Fed's decision-making meetings in July and September. Last month, he indicated that if inflation and the labor market continue to cool, the Fed may consider an interest rate cut at its next meeting.