This article first appeared in The Edge Malaysia Weekly on March 17, 2025 - March 23, 2025

The US Federal Open Market Committee (FOMC) is due for a rate decision on Wednesday (March 19), with most economists surveyed by Bloomberg projecting the Federal Funds Target Rate (FFTR) range will be kept unchanged at between 4.25% and 4.5%.

Of the 74 economists surveyed as at March 14, only two expect a 25-basis-point cut to within the 4%-to-4.25% range. The meeting comes as most nowcasting models suggest the US economy is slowing in the first quarter.

The Federal Reserve Bank of Atlanta pointed out that its GDPNow model estimates for real gross domestic product (GDP) to have contracted by 2.8% in the first quarter as at March 3, from a contraction of 1.5% as at Feb 28.

“This looks like [Atlanta Fed’s GDPNow] is overstating the weakness, and survey data such as the S&P Global PMI (Purchasing Managers’ Index) points to a more moderate slowdown, though even the PMI data has fallen sharply to an extent now consistent with a mere 0.6% rate of growth in February.

“Surveyed companies report demand weakness from federal budget cutting and tariff-related uncertainty,” states S&P Global Market Intelligence in its report dated March 14.

The lower-than-expected consumer price index (CPI) for February masked, however, a worrying stickiness of underlying inflation, notably in core goods prices, S&P Global Market Intelligence observed.

Prices of goods and services increased less than expected in February, and the CPI ticked up a seasonally adjusted 0.2% for the month, putting the annual inflation rate at 2.8%, according to the US Bureau of Labor Statistics. The all-item CPI increased 0.5% in January.

Nevertheless, the additional tariffs announced in March will only add to concerns that the inflation trajectory is heading north. The US reinstated its global tariff on all imports of steel at 25% and increased the tariff on aluminium to 25%, effective from March 12.

It also extended duties to hundreds of downstream products made from steel and aluminium, from nuts and bolts to bulldozer blades and soda cans.

“With the Fed still smarting from underestimating inflation after the pandemic and non-farm payrolls pointing to resiliency in the job market, the markets think there’s a high bar to imminent US rate cuts,” says S&P Global Market Intelligence.

Other central banks releasing their monetary policy decisions this week include the Bank of Japan (BoJ) on March 19, and Bank of England (BoE) as well as Central Bank of China (CBC) (Taiwan) on March 20.

Economists polled by Bloomberg expect no changes to BoJ’s policy call rate of +0.5%, BoE’s policy rate of 4.5% and CBC’s 2%.

A slew of US data will be released this week, including retail sales and housing data for February, as well as industrial production and leading index for the month. Japan also will be releasing its key trade data and CPI for February this week.

The UK will release its unemployment data for January on March 20, as well as the average weekly earnings excluding bonuses for the month.

In Asia, China’s 1-year and 5-year loan prime rate (LPR) fixing will be released on March 20. According to the Bloomberg poll as at March 14, all 10 economists surveyed expect the rate fixings to be unchanged at 3.1% for the 1-year LPR and 3.6% for the 5-year LPR.

While weak price pressures in China remain conducive to further monetary policy easing, depreciation pressure on the renminbi may affect the timing of any interest rate cuts.

Meanwhile, Singapore will announce its non-oil domestic exports data for February on March 17, with Bloomberg estimating a 10.6% year-on-year growth. UOB Global Economics and Markets Research expects a smaller y-o-y increase of 6.4%.

The Department of Statistics Malaysia is scheduled to release Malaysia’s monthly external trade statistics on March 20 and its CPI for February the following day.

On the corporate side, Pharmaniaga Bhd (KL:PHARMA) is scheduled to hold an extraordinary general meeting on March 20 to vote on its revised regularisation plan, which consists of a RM520 million capital reduction, a rights issue to raise up to RM353.52 million and a RM300 million proposed private placement.

AEON Credit Service (M) Bhd (KL:AEONCR) is expected to release its financial results for 4QFY2025 ended Feb 28 on March 19. Poh Kong Holdings Bhd’s (KL:POHKONG) results for 2QFY2025 ended Jan 31 will be out on the same day.

Top Glove Corp Bhd (KL:TOPGLOV) is expected to release its financial results for 2QFY2025 ended Feb 28 on March 20.

On March 21, Astro Malaysia Holdings Bhd (KL:ASTRO) will release its financial results for 4QFY2025 ended Jan 31 on March 21, and Eco World Development Group Bhd (KL:ECOWLD) will release its financial results for its 1QFY2025 ended Oct 31, 2024.

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