Global markets are focused on the Fed's interest rate decision.

03.05.2025 12:42

Global markets exhibited a positive trend during the week, driven by expectations that the U.S. and China could negotiate tariffs, macroeconomic data, and the earnings reports released by American companies. Attention is now focused on the interest rate decision that the U.S. Federal Reserve (Fed) will announce next week.

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Global markets remained positive during a week where expectations arose that the US and China could negotiate tariffs, macroeconomic data, and the earnings reports of American companies took center stage, while eyes turned to the interest rate decision to be announced by the US Federal Reserve (Fed) next week.

EYES ON THE FED'S INTEREST RATE DECISION

Hopes that the US administration could negotiate with China regarding the tariffs implemented as part of its protectionist trade measures increased risk appetite in the markets. As every new piece of news on this topic captured investors' attention, macroeconomic data, especially growth in the US, also took the spotlight in the past week. Last week, the US economy recorded a contraction for the first time since 2022, while the Fed's steps, which are closely monitoring upcoming data amid the inflation-recession dilemma, became the focus of investors.

EXPECTATIONS TO KEEP RATES STEADY

Following the announcement of monetary policy decisions next week, Fed Chairman Jerome Powell's verbal guidance will also be closely monitored. Pricing in the money markets indicated that there is a strong expectation that the Fed will keep the policy rate steady next week. After the non-farm payroll data exceeded expectations and the unemployment rate remained stable, forecasts for the bank's first interest rate cut of the year weakened in June, while predictions for July gained strength.