Market Report- March 2025

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After multiple tumultuous and unpredictable weeks, the stock market is showing signs of recovery, and of positive momentum. Economic indicators, such as GDP growth, unemployment, and inflation, show signs of decreasing uncertainty, after the market's panic over the Trump tariffs. This past week, in particular, the Fed left interest rates unchanged, between 4.25%-4.5%. With that being said, the lack of change in Fed interest rates prompted markets to quell some of the fears of recession, and prolonged economic turmoil. 

The Power of Positive Thinking Returns to Markets - WSJ

Investors, prior to the Federal Reserve's March meeting, feared major indexes, such as the S&P 500 and the NASDAQ, sliding deeper into correction territory, the US economy teetering on the break of recession, and the emergence of stagflation. For clarification, stagflation is when the economy experiences high inflation, and high unemployment, mixed with little to no economic growth. A prominent example of this occurred during the Oil Crisis of 1973 when OPEC placed an embargo on nations that had supported Israel during the Yom Kippur War of 1973. This act caused oil prices to skyrocket across the globe, with inflation nearly reaching 20% in the US. 

Understandably, this is what investors feared. Investors feared that tariffs, and the trade war that the Trump Administration had invoked, prices of goods would rise greatly across the US, causing inflation to rise and economic growth to stall. However, Chair Jerome Powell assured investors, in a certain sense, that this was not to happen. Investors and market analysts look for Fed interest rates to be lowered during the Federal Reserve's May meeting. 

Comments

  1. Jim D.March 24, 2025 at 9:29 AM

    Very interesting and informative post. The Federal Reserve continues to serve the dual mandate of maximum employment and price stability. Let's hope there is 1 or possibly 2 rate cuts in 2025.

    ReplyDelete
  2. IreneApril 18, 2025 at 10:52 AM

    Very informative.

    ReplyDelete
  3. DeliaDMay 1, 2025 at 7:38 PM

    The Federal Reserve is in a very difficult position. Trying to evaluate interest rates while measuring the impact of potential tariffs is challenging monetary policy in an unprecedented manner.

    ReplyDelete

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