Today’s markets analysis on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade
17th March 2025
The US Dollar traded within a narrow range, near five-month lows, in anticipation of this week’s Federal Reserve interest rate decision. While interest rates are expected to remain unchanged, investors will carefully monitor Fed Chair Jerome Powell’s speech to assess the next steps in monetary policy. His comments could influence market sentiment over the coming weeks.
Concerns over the US economy have grown following signs of a cooling labor market and a drop in consumer sentiment. Over the weekend, Treasury Secretary Scott Bessent acknowledged the risk of a potential recession, further dampening confidence. If the central bank adopts a more dovish stance in response to the slowing economy and easing inflation, the greenback and US treasury yields could decline. Additionally, lingering trade uncertainty could fuel volatility.
US Treasury yields were mixed at the start of the week. The 10-year note remained near 4.3%. Yields could react to Powell’s comments later in the week and to new economic data and could decline if expectations of a softer monetary policy increase.
Meanwhile, geopolitical developments could also play a role in shaping market sentiment. A positive shift could boost risk-on sentiment and weigh on the US dollar, whereas any setback could temporarily support the currency.