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China Factory Activity Slips in January as Weak Demand Weighs on Growth Outlook 
Bank of Japan Likely to Delay Rate Hike Until July as Economists Eye 1% by September 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
Trump to Announce New Federal Reserve Chair Pick as Powell Replacement Looms 
Asian Currencies Trade Flat as Dollar Retreats After Fed Decision 
Dollar Struggles as Policy Uncertainty Weighs on Markets Despite Official Support 
U.S. Government Faces Brief Shutdown as Congress Delays Funding Deal 
Wall Street futures saw volatile movement Wednesday night after the Federal Reserve held interest rates steady, as expected, while signaling a prolonged pause in rate cuts. U.S. stock indexes reacted negatively, closing lower on concerns that rates may remain high longer than anticipated.
Fed Chair Jerome Powell offered little clarity on future easing, reinforcing expectations of an extended pause. Analysts noted that the Fed’s stance, while slightly hawkish, did not indicate any imminent rate reductions. Bank of America (NYSE:BAC) analysts stated that Powell’s comments supported their view that the rate-cutting cycle is over, especially with no signs of a March rate cut.
Deutsche Bank (ETR:DBKGn) analysts echoed this sentiment, citing Powell’s emphasis on the resilience of the U.S. economy and labor market as reasons for maintaining current rates. The Fed also signaled a cautious stance amid policy uncertainty under former President Donald Trump, who has pledged aggressive fiscal reforms, corporate tax cuts, and a stricter trade policy.
Trump criticized the Fed, accusing it of failing to control inflation. He vowed to curb price pressures through economic reforms. Standard Chartered (OTC:SCBFF) analysts noted that Powell is balancing concerns over Trump’s potentially inflationary policies with the risk of politicizing monetary policy by preemptively adjusting rates.
The Fed cut rates by 1% in 2024, citing progress in lowering inflation. However, sticky inflation led the central bank to signal a slower pace of cuts in 2025. Powell also expressed uncertainty regarding Trump’s policies and their economic impact, with analysts suggesting the Fed’s cautious approach could extend well into the year.
