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US inflation, as measured by the Consumer Price Index (CPI) for All Urban Consumers, dipped by 0.1% in March 2025, after a 0.2% rise in February, according to data released by the US Bureau of Labor Statistics on April 10.

Core inflation, which excludes food and energy, edged up by 0.1% in March, following a 0.2% increase in the previous month.

On an annual basis, unadjusted CPI inflation stood at 2.4% for the 12 months ending March 2025.

Used car prices in the US surged in April, reaching their highest level since October 2023, as buyers rushed to make purchases ahead of potential tariff-related cost increases, CNBC reported.

Citing data from Cox Automotive, CNBC said the Manheim Used Vehicle Value Index — which measures wholesale used vehicle prices in the US — rose 4.9% year-on-year to 208.2. The index also jumped 2.75 points from March, a sharp rise compared to the typical monthly move of just 0.2%, according to the auto data firm.

At the March 2025 policy briefing, US Federal Reserve Chair Jerome Powell said the economy “seems to be healthy” despite a sharp decline in sentiment. He added that while activity hadn’t weakened significantly, the economic outlook was “unusually elevated” in terms of uncertainty.

Powell noted that the Fed was prepared to remain patient and observe how conditions evolve before deciding on further policy action.

Craig Chan, Head of Global FX Strategy at Nomura, says investors are becoming nervous due to shifting US policies. First, concerns focused on global risks and their impact on artificial intelligence. Later, the spotlight moved to trade rules and restrictions. Now, some are even questioning whether US treasuries could be taxed differently. All these changes have made investors less confident, leading many to reduce their US investments.

Federal Reserve Chair Jerome Powell will announce his policy decision at 11.30 pm (IST). Markets largely expect the Fed to keep interest rates steady for the third straight meeting, following a 25 basis point cut in December that brought the rate to 4.25%–4.5%.

According to the CME FedWatch Tool, there is almost no expectation of a cut in May, while the chances of a 25 bps reduction in June stand at about 30%.

According to the Financial Times, nearly every analyst they surveyed expects the same outcome: tariffs at current levels are likely to dampen growth and push up prices. The paper agrees with this consensus, noting that even though affluent US consumers still have some financial buffer, this may not be enough to fully curb inflationary pressure. In fact, higher prices could be on the way.

The FT also reports that a broader slowdown is becoming more probable. While a sharp rise in unemployment might be tempered by slower growth in the labour force, most analysts still anticipate joblessness could climb to around 4.8%. Though overall economic activity remains relatively firm, early signs of strain are visible—durable goods purchases have weakened, input costs are rising across sectors, and shipping data indicates a pullback in trade with China.

The US Federal Reserve will announce its interest rate decision on Wednesday, May 7, 2025, at 2:00 p.m. Eastern Daylight Time (EDT), which corresponds to 11:30 p.m. Indian Standard Time (IST) the same day.

Catch all the live updates on Jerome Powell’s address here

US Treasury Secretary Scott Bessent, in testimony before the House Financial Services Committee on Wednesday, declined to share details on the status of ongoing trade negotiations, citing the sensitivity of the discussions.

Responding to a question from Representative Nydia Velázquez, Bessent said, “It would be detrimental to the interest of the United States,” adding that talks may still be underway. “We are not at the end of the week yet,” he said.

Bessent is expected to travel to Switzerland on Thursday for a key meeting with Chinese officials, joined by US Trade Representative Jamieson Greer.

Of the 18 trade agreements under negotiation, Bessent said several are in “quite advanced” stages but clarified that any initial pacts would be “agreements in principle” and would take months to finalise. (Source: CNN)

Goldman Sachs expects the US Federal Reserve to cut rates in July, September, and October, per a CNBC report.

“We think it will take a couple of months for enough hard data evidence to accumulate to make the case for a cut,” Goldman Sachs economist David Mericle said in a note.

The firm expects inflation concerns to take priority over economic weakness.

The Federal Reserve is expected to announce its latest monetary policy decision at 11.30 pm IST. CNBC reports that Fed funds futures are pricing in a near-certainty that the central bank will hold the borrowing rate steady.

The major averages experienced a decline from their recent highs after Treasury Secretary Scott Bessent clarified that the trade talks scheduled for this weekend in Switzerland with Chinese officials would primarily be preliminary. Initially, news of these discussions had given equities a boost.

Traders will closely monitor Fed Chair Jerome Powell’s post-decision press conference for valuable insights into the potential trajectory of interest rates in the future. This announcement comes at a critical juncture for the central bank leader, who has faced criticism from US President Donald Trump, who has expressed his desire for his “termination to come swiftly.”

Bank of America upgraded Honeywell International’s shares to a buy rating from neutral. Analyst Andrew Obin also lifted his price objective for the conglomerate to $250 from $210. Honeywell shares have shed 7% in 2025, but Obin’s updated forecast is approximately 19% above the stock’s Tuesday closing price.

Stocks remained relatively unchanged on Wednesday as investors eagerly awaited the Federal Reserve’s interest rate announcement later in the day. Traders also closely monitored the latest developments in US trade negotiations.

The S&P 500 and Nasdaq Composite both experienced slight fluctuations, while the Dow Jones Industrial Average experienced a modest 0.4% increase, driven by a 10% surge in Disney shares. This surge was attributed to Disney’s surprising jump in streaming subscribers.

The Federal Reserve is scheduled to announce its latest monetary policy decision at 11.30 pm IST.

Warren Buffett, with 18,000 trading days of experience, dismisses recent market volatility as insignificant compared to historical downturns. He emphasises the importance of a long-term investment philosophy, highlighting that short-term fluctuations should not deter investors. Buffett advises against panic and suggests adopting a diversified portfolio and consistent investment strategy, regardless of market conditions.

The US dollar index strengthened slightly against other major currencies, gaining 0.1% to 99.45, while US 10 year Treasury bond yields eased to 4.30% from 4.32%.

According to HSBC, bond yields are likely to move lower. “I don’t think the 10-year yield will break above 4.50%. When it hit 5% last year, policy rates were 100 basis points higher than now. With current rates and expectations of easing, it’s hard to see the 10-year going above 4.50%,” Steven Major, Global Head of Fixed Income at HSBC told CNBC-TV18.

Steven Major, Global Head of Fixed Income at HSBC, forecasts three rate cuts by the US Federal Reserve this year, followed by two more in 2026.

Major explained that while the Fed’s own projections suggest more cuts could happen, it’s also about probabilities. “It’s like saying there’s a 50% chance they cut six times, and a 50% chance they don’t cut at all,” he noted.

Matt Orton, Chief Market Strategist at Raymond James, is cautious about the near-term market outlook despite the recent rebound.

“In the short term, I am a little bit cautious… and that is largely because a lot of good news has already been priced in,” he said.

He believes that even as fears around tariffs have begun to ease as the US administration appears more responsive to market reactions, there are overly optimistic rate cut expectations that might lead to a temporary pause in momentum.

Ed Yardeni, President of Yardeni Research, does not expect any interest rate cuts from the US Federal Reserve anytime soon, as the economy remains strong.

“I have been in the ‘none and done’ camp,” Yardeni said, explaining that there is no need for the Fed to act right now. Data on payroll numbers and inflation indicate signs of resilience, and he believes the tariff uncertainties are unlikely to change the Fed’s wait-and-watch approach.

Fitch Ratings has significantly lowered its US economic growth estimate for 2025 to 1.2%, down from 2.8% last year, and says an interest rate cut from the Federal Reserve is unlikely in the near term.

“The Fed will likely wait until the fourth quarter before cutting rates,” said Brian Coulton, Chief Economist at Fitch. He cited rising inflation pressures from new tariffs and added, “We have US inflation heading above 4% by year-end.”

Coulton also warned that growing household inflation expectations could make it harder for the Fed to ease policy without risking its credibility.

Stocks moved higher on Wednesday as investors kept an eye on US trade developments and awaited the Federal Reserve’s rate announcement later in the day.

The Dow Jones Industrial Average rose 213 points, or 0.5%, while the S&P 500 added around 0.4%. The Nasdaq Composite was up about 0,3%.

Taimur Baig, Chief Economist at DBS Group Research, says those expecting a rate cut may be misreading the Fed’s room to act. He argues that sticky inflation, not recession, is the bigger concern.

“US producers are clear in their signalling. They will raise prices. They are raising prices,” Baig told CNBC-TV18, pointing to tariff-driven cost pressures and supply chain challenges that complicate the Fed’s ability to ease.

While recent growth data looked weak, Baig said it was likely distorted by import frontloading ahead of new tariffs. He expects the US economy to grow between 1.5% and 2% in the first half of 2025. “I don’t think the US economy is about to crater,” he added.

Recent data suggests that inflation in the US is easing gradually—a positive sign that now faces new risks from the Trump administration’s fresh round of tariffs, which could undo progress by driving prices back up.

The labour market remains strong, with April figures showing a gain of 177,000 jobs, giving the Fed reason to stay patient. But growing concerns that the new tariffs could dampen economic momentum are adding to the uncertainty around the Fed’s path ahead.

According to CNBC’s May Fed Survey, most respondents still expect the US Federal Reserve to cut interest rates later this year and again in 2026. However, with no updates to economic projections or the Fed’s “dot plot” expected at this week’s meeting, investors will rely heavily on the post-meeting statement and Chair Jerome Powell’s press conference for clues.The US Federal Reserve Chair Jerome Powell is widely expected to hold rates steady on May 7, keeping the key policy rate in the 4.25% to 4.50% range, where it has remained since December 2024. According to CME Group data, futures traders currently assign a probability of over 95% to the Fed making no changes at this meeting.Global markets moved in different directions on Wednesday as investors awaited the US Federal Reserve’s interest rate decision and tracked developments ahead of key trade negotiations between the US and China.Chinese stock markets closed higher, buoyed by fresh stimulus measures from Beijing aimed at boosting the country’s slowing economy. These steps helped offset some of the negative sentiment stemming from ongoing US tariff actions.In Europe, major indices in London, Paris, and Frankfurt slipped during midday trading as caution prevailed ahead of the Fed announcement.Geopolitical tensions in South Asia also rattled investor sentiment. Pakistan’s Karachi Stock Exchange plunged over 6% at the opening bell following reports of intensified cross-border shelling with India. It later pared losses to end about 3% lower.India’s Sensex, meanwhile, was around 100 points up.

Walt Disney Co. reported fiscal second-quarter results that beat Wall Street estimates and raised its outlook for the full year, citing strong performances from theme parks and streaming TV. Full-year fiscal 2025 earnings, excluding certain items, will rise 16% to $5.75 a share, Disney said Wednesday in a statement, about double its previous forecast for growth. Analysts were looking for $5.44 a share.

A number of major companies have pulled their 2025 guidance amid the uncertainty caused by US President Donald Trump’s tariffs on imported goods. But Disney is benefiting from faster-than-expected growth at its namesake parks and streaming business, and pointed to that strong performance to boost its guidance.

Uber Technologies Inc. reported weaker-than-expected quarterly gross bookings and slower gains in its rideshare business, raising the possibility of a consumer pullback amid souring sentiment about the economy.

Gross bookings, which include ride hails, delivery orders and driver and merchant earnings but not tips, were $42.8 billion in the first three months of 2025, Uber said in a statement Wednesday. Analysts projected $43.1 billion, according to Bloomberg-compiled data. Revenue also landed below expectations at $11.5 billion, as did operating income.

Chief Financial Officer Prashanth Mahendra-Rajah said in prepared remarks that the strengthening of the US dollar against Brazilian, Mexican and Argentine currencies created an “outsized headwind” for its rides business. But even at constant currency rates, rideshare bookings in the period slowed to 20% from 24% in the prior quarter.

Russia kept its crude oil production below the nation’s OPEC+ quota in April, according to people familiar with the data.

Producers pumped 8.975 million barrels a day last month, almost unchanged from March levels, the people said, asking not to be identified because the information isn’t public. That’s 23,000 barrels a day below Russia’s target for April under the OPEC+ deal, including compensation for past overproduction.

Compliance with the supply agreement of the Organization of the Petroleum Exporting Countries and its allies has been in the spotlight in recent weeks. OPEC+ leader Saudi Arabia steered the alliance to agree on higher-than-projected output hikes in May and June to punish overproducing nations such as Kazakhstan and Iraq, warning of more supplies unless laggards fall in line.

European markets were lower on Wednesday, with traders monitoring regional corporate earnings releases and awaiting the US Federal Reserve’s latest monetary policy announcement.

The pan-European Stoxx 600 index was 0.3% lower at 10:42 a.m. in London, with healthcare stocks down 1%, leading the losses.

Europe’s pharmaceuticals industry is still reeling from US President Donald Trump’s Monday announcement that tariffs for the sector would be announced within the next two weeks.

US Treasuries slipped ahead of the Federal Reserve’s interest-rate decision, with investors betting on a slower pace of monetary easing in the face of data suggesting economic resilience.

The yield on two-year notes rose four basis points to 3.82% as traders trimmed wagers on rate cuts, seeing around three quarter-point reductions in 2025 starting in July. That compares to Thursday’s pricing of a percentage point of easing this year likely starting in June — before stronger-than-expected US economic data sparked a sharp rethink.

With the central bank expected to keep its benchmark rate steady at 4.25%-4.50% on Wednesday, traders will be scrutinizing comments by Fed Chair Jerome Powell for insight into officials’ interpretation of recent data and whether President Donald Trump’s economic policies are prompting any change in view on when to ease policy. That’s as tariffs on imported goods dents consumer confidence while also potentially fanning price pressures.

China expanded its gold reserves for a sixth straight month in April, underlining its push to boost holdings of the precious metal as prices trade near a record and the trade war rumbles on.

Bullion held by the People’s Bank of China rose by about 70,000 troy ounces last month, according to data on Wednesday. In the latest six-month span, volumes have climbed by close to 1 million ounces, or about 30 tons.

Gold has rallied to successive records this year, supported by concerted central-bank buying as authorities seek to diversify holdings away from the US dollar. Bullion’s upswing — with prices up nearly 30% this year — has also been aided by rising investment demand as the US-led trade war unsettles financial markets, raises concern about US assets, and drives haven demand.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.