The Profit Margin: March 24, 2025
Statistic of the Week
Last week, spot gold prices reached a new all-time high, with the price for an ounce surpassing $3,000 for the first time. Concerns over the global economy and escalating tensions in the Middle East played a significant role in driving up the price as investors sought a haven. Historically, gold has been considered a refuge for investors amid times of uncertainty and market volatility.
Global Perspective
The Federal Reserve, Bank of England, and Bank of Japan all had meeting announcements last week. Each of the central banks left target interest rates unchanged. The Federal Reserve and Bank of England are expected to reduce rates in the coming months, while the Bank of Japan is gradually increasing rates. In their statements, all three banks noted that uncertainty around trade could impact their future course of action.
Market Moving Events
Tuesday: Consumer Confidence, New Home Sales
Wednesday: Durable Goods Orders
Thursday: Jobless Claims, GDP Revision, Trade Balance, Pending Home Sales
Friday: Personal Income and Spending, PCE Index, Consumer Sentiment
Commentary
All three major domestic equity indices managed to achieve modest gains last week. Markets appeared to be probing for a short-term bottom and were aided by a comment from President Trump, “the word ‘flexibility’ is an important word.”1 The DJIA led the pack with a 1.20% increase.2 Meanwhile, the S&P 500 broke its four-week losing streak by rising 0.51%.3 The Nasdaq also ended up in positive territory, climbing 0.17% and ending a five-week stretch of declines.4 In the fixed income markets, yields fell slightly. The 10-year Treasury closed on Friday with a yield of 4.26%, down 0.06% from the week prior.5
Much of last week’s focus was on Wednesday’s Federal Reserve meeting announcement and subsequent press conference with Chair Powell. Powell indicated that the Federal Reserve anticipates the economic effects of tariffs to be “transitory.”6 Additionally, the Fed has updated several forecasts for the upcoming year. Although deemed “transitory,” the tariff impacts are projected to reduce GDP by 0.5%. The Fed has set a new growth target of 1.7% for 2025. The unemployment rate is expected to rise to 4.4% by the end of the year, although this remains below historical averages. Notably, the Fed predicts that the core inflation rate will reach 2.8% by year-end, an increase from the earlier estimate of 2.5%.7
This week, investors will likely focus on two consumer confidence readings and Friday’s PCE Index release. Headlines out of Washington have the potential to quickly shift market sentiment.
Chart of the Week
The Federal Reserve left the target benchmark rate unchanged in the meeting announcement on Wednesday. The current target range is 4.25%-4.50%.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week:
Clearnomics,
The Federal Reserve
Statistic of the Week:
The Economist
Global Perspective:
The Economist
Commentary:
1. Barron’s
2. Bloomberg
3. Bloomberg
4. Bloomberg
5. MarketWatch.com
6. Investor’s Business Daily
7. Investor’s Business Daily