Rate Rumble Next Week, Will the Market Tumble?

Monday,17 March 2025, 14:30 – US Core Retail Sales (MoM) (Feb)

The U.S. Core Retail Sales MoM for January 2025, released on February 14, 2025, declined by 0.4%, missing the forecasted 0.3% growth and falling from a 0.7% increase in December 2024. The figure was driven by severe weather disruptions like frigid temperatures and wildfires, a post-holiday spending slowdown, and broader consumer caution amid inflation and tariff concerns, as supported by Reuters and TD Economics reports. For the upcoming release, a modest recovery is expected to around 0.2% – 0.4%, fueled by improved weather and consumer resilience, though inflation and tariff risks could temper this expectation.

Wednesday, 19 March 2025, 05:00 – BoJ Interest Rate Decision

The latest Bank of Japan (BoJ) Interest Rate Decision, announced on January 23, 2025, resulted in a 25-basis-point hike, raising the short-term policy rate from 0.25% to 0.5%, the highest level since 2008. This decision, made with an 8-1 vote, was driven by rising inflation—Japan’s core consumer inflation hit 3.0% in December 2024, the fastest pace in 16 months—alongside expectations of sustained wage growth and a weak yen increasing import costs, according to the BoJ’s quarterly outlook report. The central bank expressed confidence in achieving its 2% inflation target, with Governor Kazuo Ueda signaling readiness for further hikes if economic conditions align, though global uncertainties like U.S. tariff policies under President Trump remain a concern. For the upcoming BoJ meeting, the rate to remain unchanged at 0.5%, as market expects policymakers may hold off on further hikes to assess domestic wage trends and global market stability, though a stronger-than-expected yen or inflation could prompt a modest 25-basis-point increase.

Wednesday, 19 March 2025, 20:00 – Fed Interest Rate Decision

In January, the Federal Reserve maintained the target range for the federal funds rate at 4.25% to 4.5%, marking the first pause after three consecutive rate cuts totaling 1 percentage point since September 2024.This decision was driven by a solid economic pace, a stable yet low unemployment rate, and inflation remaining somewhat elevated at 2.9% year-over-year in December 2024, above the Fed’s 2% target, prompting a cautious stance as noted by Chair Jerome Powell, who emphasized the need to assess incoming data and the impact of potential Trump administration policies like tariffs. The Fed’s December projections had already scaled back expected 2025 rate cuts to 0.5%, reflecting concerns over sticky inflation and economic uncertainty, with some dissent within the committee on the pace of future adjustments. For the upcoming meeting, the rate is expected to remain unchanged at 4.25% to 4.5%, given the Fed’s data-dependent approach and ongoing inflationary pressures, though a stronger-than-expected economic slowdown or significant progress toward the 2% inflation target could open the door to a 25-basis-point cut, while tariff-driven price increases might delay any action further.

Thursday, 20 March 2025, 10:30 – SNB Interest Rate Decision (Q1)

On December 12, 2024, the Swiss National Bank (SNB) announced a 50-basis-point rate cut, lowering its policy rate from 1.0% to 0.5%—the largest reduction in nearly a decade and the lowest level since November 2022. This move exceeded market expectations, as over 85% of economists polled by Reuters had anticipated a smaller 25-basis-point cut. The decision was driven by weaker-than-expected inflation, which stood at 0.7% in November—comfortably within the SNB’s 0-2% target range—as well as global economic uncertainties, including risks associated with U.S. policy under the Trump administration and political instability in Europe. The SNB aimed to counteract the Swiss franc’s appreciation and support exporters through this easing. Looking ahead to upcoming meeting, the Swiss central bank is anticipated to maintain the rate at 0.5%, as the central bank is expected to maintain a cautious stance to avoid negative rates unless deflation risks arise. However, a smaller 25-basis-point cut to 0.25% remains possible if inflation continues to weaken or the franc strengthens significantly, threatening export competitiveness.

Thursday, 20 March 2025, 14:00 – BoE Interest Rate Decision (Mar)

On February 6, 2025, the Bank of England (BoE) lowered its interest Rate by 25 basis points, reducing it from 4.75% to 4.5%. The Monetary Policy Committee (MPC) voted 7-2 in favor of the cut, with two members pushing for a larger 50-basis-point reduction. The decision was driven by a weakening economy, with growth projections for 2025 revised downward from 1.5% to 0.75%, and inflation at 3.0% in January—above the BoE’s 2% target but expected to climb to 3.7% later in the year due to rising gas prices. The rate cut aimed to boost spending amid near-recessionary conditions, though Governor Andrew Bailey warned of ongoing challenges, including global risks like U.S. tariffs. Looking ahead, BoE is expected to keep rates at 4.5% amid ongoing inflation concerns from officials such as Huw Pill and Catherine Mann, signaling a cautious stance. However, if economic conditions deteriorate further or inflation declines more than expected, a 25-basis-point cut to 4.25% remains a possibility.