Money News Overview Wednesday 20th March: Fed in focus today

Tuesday is relatively quiet on the economic front, with only one major event scheduled.

Earlier this morning, the UK revealed that headline CPI inflation fell to 3.4% in February, down from 4.0% in January, and the lowest level since September 2021.

The results were a little lower than the consensus expectation of 3.5% but significantly higher than our forecast of 3.3%. Core CPI, which excludes energy and food, also declined to 4.5% from 5.1%, slightly lower than the average prediction of 4.6%. Within core inflation, the services CPI declined to 6.1% from 6.5%.

The economic outlook remains uncertain that the Fed will want to maintain maximum flexibility in terms of timing a move.

The most significant feature, will be the outcome of the US Fed’s monetary policy meeting following the close of business in Europe.

The FOMC is widely expected to keep policy on hold. Thus, the attention will be on Chair Powell’s words at the press conference as well as the updated economic estimates, including the interest rate dotplot.

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