New York Stock Market Focuses on 'Dot Plot' Containing FOMC Interest Rate Outlook
Summary
- The New York stock market is showing great interest in the interest rate forecast dot plot to be announced at the FOMC regular meeting.
- While the Federal Reserve is likely to keep the benchmark interest rate unchanged at this meeting, President Trump's tariff policy uncertainty continues to affect the market.
- Changes in economic indicators and the Fed's monetary policy are being closely watched for their impact on the New York stock market.
The main focus in the New York stock market this week (17-21) is the regular Federal Open Market Committee (FOMC) meeting taking place over two days on the 18th and 19th. According to the CME FedWatch, Wall Street expects with over 90% probability that the Federal Reserve (Fed) will keep the benchmark interest rate unchanged. The current U.S. benchmark interest rate is 4.25-4.50% per annum.
The market is closely watching the 'dot plot' containing FOMC members' interest rate forecasts. Last December's dot plot reduced the expected number of rate cuts this year from 4 to 2. Recently, U.S. inflation has been reluctant to fall below the Fed's target of 2%. However, market anxiety has somewhat eased as February's Consumer Price Index (CPI) rose 2.8% year-over-year, below the market expectation of 2.9%.
February retail sales, to be announced on the 17th, the first trading day of this week, is another key indicator the Fed considers. This indicator provides insight into consumer spending, which accounts for two-thirds of the U.S. economy.
Attention is also focused on what statements President Donald Trump might make regarding tariff policies this week. As of the 13th, the market capitalization of companies in the S&P500 index has evaporated by approximately $5.3 trillion compared to the February 19 peak. This is due to uncertainty surrounding the Trump administration's tariff policies. President Trump has indicated his intention to proceed with tariffs even at the risk of economic recession. Investment banks, including Goldman Sachs, have increased their probability estimates for a U.S. economic recession this year. Although the New York stock market rebounded last Friday, it remains to be seen how various economic indicators and the Fed's monetary policy will impact the market in the current climate of subdued investment sentiment.
Jensen Huang, NVIDIA CEO's remarks are also drawing market attention. CEO Huang will participate in 'GTC 2025' held in Silicon Valley from the 17th to 21st, and on the second day of the event, the 18th, he will deliver a speech on artificial intelligence (AI) and accelerated computing technologies that are changing the world.
New York=Park Shin-young, Correspondent nyusos@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
