Market Highlight 19.03.2025

Federal Reserve policymakers are expected to keep the benchmark interest rate unchanged at the conclusion of their March meeting, allowing more time to assess the impact of President Donald Trump’s policies on an economy grappling with both persistent inflationary pressures and growing concerns over slowing growth. New tariffs imposed by the administration, coupled with retaliatory measures from U.S trade partners, have dampened consumer confidence and fueled expectations of higher future inflation. While additional tariffs are scheduled to be announced on April 2, the ultimate trajectory of the trade war and its long-term implications for the economy remain uncertain. This uncertainty may lead policymakers to adopt a wait-and-see approach, avoiding commitment to a fixed policy path. In their December economic projections, the Federal Reserve had anticipated two rate cuts in 2025. Given the current economic landscape, markets are now pricing in three 25-basis-point rate cuts at the FED’s June, July, and October policy meetings. Meanwhile, U.S Treasury Secretary Scott Bessent stated last night that the U.S economy remains fundamentally strong and there is no reason to fear a recession.

The USD weakened by 0,16% on Tuesday, slipping 0,2% against the euro after the German parliament approved a major investment spending plan, while the FED’s ongoing March policy meeting is expected to provide further clarity on the future rate path for the U.S economy. In Vietnam, the USD/VND exchange rate edged higher yesterday, closing at 25.530. The market is expected to remain stable within the 25.500 - 25.600 range today, awaiting the final outcome of the Federal Reserve’s policy meeting, which will be announced early tomorrow morning.

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Directly contact us to receive market news and consultancy on foreign exchange products and derivatives:

- Financial Markets Division – Email: ktttc@acb.com.vn ; or

- Mr. Khanh Hoang (Financial Markets Senior Analyst) – Email: hoangnk@acb.com.vn