A number of significant economic events scheduled for the week, as well as a banking Industries turmoil in the United States. It is anticipated that both the domestic market and its international equivalents will remain volatile.
Given the ongoing financial crisis & recent economic statistics. The 2-day United states FOMC monetary policy meeting. Which is set for Mar 21 & 22, will keep markets busy throughout the world.
Everyone is waiting to see if the United states Federal Reserve will raise interest rates by 50 bps (bps) or just 25 basis points.
Following Powell’s aggressive congressional testimony on Mar 8, odds for a half-point rate rise surged to almost 80 percent. But, those bets vanished in a matter of days. With chances of a 50 basis points move falling to around 2 percent on the morning of Mar 13.
The Federal Reserve Rate Monitor Tool calculated that the probability of a 0.25% point change was 62 percent based on recent survey. The Federal Reserve fund target would then fall between 4.75 percent and 5.00 percent.
Given the robust United states labour market, the markets had originally predicted a 50 basis point rate increase.
The chance of a 25 basis points price rise at this week’s meeting has decreased. However, due to the ongoing. Recently implemented financial crisis and the fact that United States Consumer price inflation slowed to 6 percent YoY in February 2023 from 6.4 percent in January.
Vinod Nair, Head of Research at Geojit Financial Services, writes in a note that “easing United states inflation reinforced confidence that the Federal Reserve would not choose for a punitive rate rise of 50 basis points & would possibly contemplate taking a pause during the March meeting.”