![]() ![]() The final vote of the week came on March 14, he said, when Parliament approved a motion to postpone the UK’s departure date from the EU, currently scheduled for March 29. “The outcome of this vote was received well by markets,” Eitelman said, explaining that it helped to remove some of the downside risks of Brexit. This was followed on March 13 by a vote rejecting a no-deal exit from the European Union (EU). ![]() Shifting to Brexit, Eitelman noted that it was a busy week for lawmakers in the UK, with Parliament first turning down Prime Minister Theresa May’s latest Brexit deal proposal on March 12. “The ongoing softness in inflation has led to speculation in markets that the Fed may hold off on rate increases for longer than originally thought,” Eitelman explained, adding that he and the team of Russell Investments strategists now believe the central bank probably won’t hike again until December. This suggests that the Fed’s primary inflation indicator, the core personal consumption expenditures price index, may come in below the central bank’s 2% target. Meanwhile, inflation has generally remained weak, Eitelman said-as evidenced by a 1.5% year-over-year increase in the Labor Department’s Consumer Price Index in February. Markets have responded by generally posting strong gains, he noted, while tentative signs have also emerged that global economic growth may be on the upswing. The sell-off in markets during the fourth quarter of 2018.The Fed signaled a pause in rate hikes at its last meeting for three main reasons, Eitelman said: “This, combined with Chair Jerome Powell’s press conference after the meeting, should paint a more comprehensive picture of how significant the central bank’s recent shift in monetary policy has been,” he stated. “The Fed has been overly clear about its intent to pause its rate-hiking cycle,” he said, “so the importance of the meeting, from a market perspective, will revolve around guidance from the central bank on how long the pause may last.”Īt the conclusion of the meeting, the Fed will release an updated set of interest-rate projections, and markets will gain a better sense of how many FOMC (Federal Open Market Committee) members favor another rate increase this year, Eitelman said. The Fed convenes March 19-20 for its next monetary policy meeting, Eitelman said, noting it’s pretty much a slam-dunk that the central bank will keep interest rates unchanged. All eyes on Fed rate outlook at mid-week meeting They also chatted about the impact of recent Brexit developments on financial markets and dug into the latest data on eurozone industrial production. Federal Reserve (the Fed)’s next policy meeting. On the latest edition of Market Week in Review, Senior Investment Strategist Paul Eitelman and Sophie Antal Gilbert, head of AIS business solutions, discussed what to expect at the U.S. ![]()
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