This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
As anticipated by market observers, the U.S. Federal Reserve ended its meeting by maintaining stable interest rates. Since lower interest rates often boost the economy and stock market, a cut may have come as a welcome surprise to some. Still, it might have also heightened investor concerns that the economy is declining.
 The balm came from the Fed’s dot plot, which forecasts where central bankers believe interest rates will fall in future years. Given the unclear impact of U.S. President Donald Trump’s tariffs on inflation, some investors were worried going into the meeting that the Fed might not lower interest rates this year.
However, the stock market recovered when the Fed stuck with its projected two cuts for 2025. Acting as expected and reiterating expectations when skepticism arises can have a more significant effect during these turbulent times than any unexpected stimulus measures.
What To Note Today
Fed Holds Rates, Expects Two Cuts This Year
As anticipated by markets, the U.S. Federal Reserve opted to maintain its key borrowing rate between 4.25% and 4.5% on Wednesday. According to central bankers, rate cuts of half a percentage point, or two reductions, are still likely to occur this year. In addition, the Fed increased its inflation expectation to 2.8% from 2.5% in December but decreased its forecast for U.S. economic growth in 2025 to 1.7% from 2.1%. During his press conference, Fed Chair Jerome Powell noted the dangers of tariffs but also said that they might be “transitory.”
Chinese Central Bank Keeps Rates Stable
The People’s Bank of China maintained the prime rates for one-year and five-year loans at 3.1% and 3.6%, respectively, on Thursday. While the latter acts as a standard for mortgages, the former impacts short-term loans. The yield on 10-year government bonds dropped more than two basis points to 1.932% following the rate announcement, but the yuan barely moved, trading at 7.2280 vs. the US dollar.
U.S. Stocks Are Boosted By Potential Rate Cuts
As market investors applauded the Fed’s decision to stick with its prediction of two rate reductions this year, U.S. equities rose on Wednesday. The Dow Jones Industrial Average increased by 0.92%, the S&P 500 by 1.08%, and the Nasdaq Composite by 1.41%. Stocks in Asia-Pacific had a mixed Thursday. Data revealed that China’s youth unemployment rate increased to 16.9% in February, a four-month high, and the country’s CSI 300 plummeted about 1%.
GDP Growth Is “Better Than People Think”
Brian Moynihan, CEO of Bank of America, told CNBC on Wednesday that consumers are still spending money even though “the consumer is saying, ‘I’m getting more pessimistic,’ in some of the surveys and things like that,” “which means the economy ought to be holding up better than people think.” In contrast to 2024 and 2023, when the GDP grew by almost 3%, this year’s GDP could still expand by about 2%.
Softbank To Buy Ampere Computing
The company announced Wednesday that Ampere Computing, a business that created an Arm-based server semiconductor, will be acquired by SoftBank Group for $6.5 billion. According to a statement, the Japanese behemoth anticipates finalizing the purchase in the second half of 2025. According to SoftBank, Ampere will function as a stand-alone business and maintain its Santa Clara, California, headquarters.
One word from the Fed reached Wall Street
At its meeting and press conference, the Fed covered a wide variety of subjects, including interest rate, inflation, and GDP forecasts for this year, as well as the possible effects of tariffs imposed by US President Donald Trump. However, Wall Street only heard one message, contributing to Wednesday’s stock market recovery.
Other Reports
Oliver Burkhard, CEO of ThyssenKrupp Marine Systems, a German manufacturer of naval systems, anticipates that the market will triple by the end of the decade. On the fringes of the Singapore Defence Technology Summit, Burkhard told CNBC, “We anticipate that this attainable market in electronics, drones, surface vessels, and submarines is doubling or even tripling by the end of this decade.”
This follows the German parliament’s approval of a significant fiscal package that includes adjustments to long-standing debt regulations for increased defence spending. According to Burkhard, the action demonstrates that “there is more or less no limit anymore when it comes to the defence budget.”
