Daily Newsletter 3/18/25

Good morning.

FOMC Meeting

The next FOMC (Federal Open Market Committee) meeting is scheduled for March 18-19, 2025. This two-day meeting will be the second monetary policy decision of the year for the Federal Reserve. The FOMC typically releases its policy statement at 2:00 PM Eastern Time on the second day of the meeting, which would be March 19, 2025, followed by a press conference led by the Federal Reserve Chair at 2:30 PM Eastern

the upcoming FOMC meeting on March 18-19, 2025, is important for several reasons:

1. Rate Decision: While the Federal Reserve is expected to keep the federal funds rate unchanged at 4.25% to 4.50%, any surprise decision could significantly impact financial markets.

2. Economic Projections: The March meeting will include updated economic projections and the "dot plot," which shows FOMC members' expectations for future interest rates. These will be closely scrutinized for shifts in the committee's outlook.

3. Future Rate Cut Signals: Investors will be looking for hints about potential rate cuts later in 2025. The current market expectation is for two to three 25-basis-point cuts in the latter half of the year.

4. Press Conference: Fed Chair Jerome Powell's comments during the post-meeting press conference will be thoroughly analyzed for insights on inflation trends, employment data, and global economic risks.

5. Market Impact: The meeting's outcome and accompanying statements could cause volatility in mortgage rates and other financial markets. Rates may move up or down depending on the Fed's commentary.

6. Economic Uncertainty: Given the mixed economic signals and ongoing concerns about inflation, the Fed's assessment of the economy's health will be crucial for market participants and policymakers.

NVDIA

NVIDIA's CEO Jensen Huang will deliver the keynote speech for GTC 2025 today, at 1 PM ET at the SAP Center in San Jose, California. Here are the key details:

1. Streaming: The keynote will be available for free streaming on NVIDIA's official website and YouTube channel.

2. Expected announcements:

   • New Blackwell Ultra GPUs with improved performance and increased memory (288GB)

   • Updates on the upcoming Rubin GPU series, set for release in 2026

   • Possible revelations about post-Rubin products

   • Advancements in AI, including applications in robotics, healthcare, and autonomous vehicles

3. Focus areas: The keynote is expected to cover quantum computing, "physical AI," robotics, healthcare, and Agentic AI.

4. Industry context: NVIDIA faces challenges due to recent overheating issues with early Blackwell cards, U.S. export controls, and competition from Chinese AI labs. This keynote presents an opportunity for Huang to address these concerns and showcase NVIDIA's latest innovations.

5. Conference scope: GTC 2025 will feature about 2,000 speakers, 400 exhibitors, and 1,000 sessions, making it a premier event for AI and technology professionals.

OECD Economic Outlook Report

The Organization for Economic Cooperation and Development (OECD) has released its latest Interim Economic Outlook report on March 17, 2025, projecting a slowdown in global economic growth. The report highlights several key points:

Global Economic Outlook

• Global growth is expected to decline to 3.1% in 2025 and further to 3.0% in 2026, down from 3.2% in the previous year.

• The United States is projected to experience a more pronounced downturn, with growth expected to fall to 2.2% in 2025 and 1.6% in 2026, compared to 2.8% in 2024.

• The euro area outlook is particularly bleak, with growth projected at just 1.0% in 2025 and 1.2% in 2026.

Inflation and Trade Concerns

• Inflation is projected to be higher than previously expected, with annual headline inflation in G20 economies forecast at 3.8% in 2025 and 3.2% in 2026.

• The OECD warns that increasing trade restrictions will contribute to higher costs for both production and consumption.

• President Trump's trade war, including tariffs on imported steel and aluminum, is expected to impact global economic growth negatively.

Policy Recommendations

The OECD report outlines several policy priorities:

1. Central banks should remain vigilant due to heightened uncertainty and potential trade-related price pressures.

2. Governments need to take decisive fiscal actions to ensure debt sustainability and create room for future economic shocks.

3. Structural reforms are needed to improve productivity and enhance the adoption of new technologies.

Positive Outlook for AI

Despite the overall cautious outlook, the OECD highlights the potential of artificial intelligence to boost labor productivity growth over the next decade, especially when combined with advancements in robotics.

Building Permits

The next release of the Building Permits Survey (BPS) data by the U.S. Census Bureau is scheduled for today at 8:30 a.m. EDT. This release will include the New Residential Construction data for February 2025.

Following this, the next important dates in the BPS release schedule are:

1. March 25, 2025: Release of revised Building Permits data for February 2025 at 8:00 a.m.

2. April 17, 2025: Release of New Residential Construction data for March 2025 at 8:30 a.m.

3. April 23, 2025: Release of revised Building Permits data for March 2025 at 8:00 a.m.

In january 2025 total building permits fell by 0.6% to a seasonally adjusted annualized rate of 1.473 million, down from 1.482 million in December 2024.

Building permits are a leading indicator of future construction activity and provide insights into housing market trends. These statistics influence economic planning and policy decisions as residential construction impacts broader economic activity.

Forecast: 1.450 million permits, compared to the previous value of 1.473 million in January 2025. Slight decrease.

Housing Starts

The next release of housing starts data from the U.S. Census Bureau is scheduled for today,at 12:30 PM EDT. This release will provide the housing starts data for February 2025.

The previous release on February 19, 2025, reported that housing starts in January 2025 were at a seasonally adjusted annual rate of 1.366 million units, which was a 9.8% decrease from December 2024's rate of 1.515 million units.

Given the recent trends and economic conditions, analysts and forecasters will be closely watching this release to gauge the health of the housing market and construction industry. The data will provide insights into whether the housing sector is rebounding from the January decline or if challenges persist..

Forecast: A slight increase to 1.380 million units, up from January's 1.366 million.

Export Price Index

The U.S. Bureau of Labor Statistics (BLS) is scheduled to release the Export Price Index data for February 2025 today, at 8:30 AM EDT. This release is part of the U.S. Import and Export Price Indexes report.