Key events to watch in the week ahead: 24 – 30 March 2025

This week’s overview

After slipping into correction territory, Wall Street attempted a recovery this week, but upward momentum remains fragile without a clear positive catalyst. Thus far, post-Federal Reserve (Fed) meeting reactions have been mixed, as Fed Chair Jerome Powell’s economic reassurances seem to contradict with mounting stagflation risks in the latest Fed’s economic projections – sharp decline in growth estimates alongside higher inflation. Meanwhile, uncertainty over US trade policies looms large as well, ahead of the April 2 deadline for reciprocal tariffs.

Heading into the new week, here are four key events to watch.

25 March 2025 (Tuesday, 7.50am SGT): Bank of Japan (BoJ) monetary policy meeting minutes

At its recent meeting, the Bank of Japan (BoJ) maintained its short-term interest rate at 0.50%, following a 25 basis point (bp) hike in January. The decision to hold rates steady was driven by concerns over rising global economic uncertainties, particularly the potential impact of US trade restrictions under President Donald Trump.

The upcoming meeting minutes will be on watch to offer deeper insights into the BoJ Policy Board's discussions, shedding light on the economic assessments and policy considerations around their decision. US policy risks and the uncertain global growth outlook will likely take centre stage for now, potentially outweighing encouraging wage and price data that suggest Japan is making good progress towards sustainably achieving the BoJ's 2% inflation target.

Nevertheless, the trajectory for the BoJ continues to lean towards further rate hikes, diverging from other major central banks that are leaning toward policy easing. Market consensus expects the BoJ to raise rates by 25 bp in July before pausing for the rest of the year.

26 March 2025 (Wednesday, 8.30am SGT): Australia’s monthly consumer price index (CPI)

The monthly CPI indicator rose by 2.5% year-over-year (YoY) in January, unchanged from the prior month but below expectations of 2.6%. The ex-volatile measure rose 2.9% in the 12 months to January compared to 2.7% in the 12 months to December. Annual trimmed mean inflation rose 2.8% in December up slightly from 2.7% in December.

The cooler inflation numbers amid sluggish growth opened the door for the Reserve Bank of Australia (RBA) to cut rates by 25bp at its Board meeting in February. However, the RBA sounded cautious, noting that future rate cuts depended largely on the continuation of the disinflationary trend.

The preliminary expectation for the February Monthly CPI indicator is for headline inflation to rise to 2.6% YoY, which will be the highest since August.

Nonetheless, should the March quarter inflation numbers, set to be released on April 30, confirm the ongoing disinflationary trend, we expect the RBA to deliver a follow-up 25 bp rate cut at its meeting in May.

26 March 2025 (Wednesday, 3pm SGT): UK CPI

In January 2025, the UK’s annual inflation rate surged to its highest since March 2024 at 3.0%, up from 2.5% in December and surpassing forecasts of 2.8%. The rise is primarily driven by higher costs in transport, food, non-alcoholic beverages and non-energy industrial goods.

In response to persistent inflationary pressures, the Bank of England (BoE) opted to maintain its interest rate at 4.5% at the March meeting. The basis for the rate inaction also stems from global economic uncertainties and heightened inflation risks linked to geopolitical tensions and trade tariffs.

Looking ahead, UK headline inflation is expected to ease slightly to 2.9%, while core inflation may moderate to 3.5% from 3.7%. Given the BoE’s cautious stance on inflation, policymakers will be keeping a lookout for substantial inflation progress before considering rate cuts. Market expectations currently forecast a 25 bp rate cut in June, followed by another 25 bp reduction in the fourth quarter. Any higher-than-expected inflation read next week could challenge current rate projections, potentially pushing back the timeline for the next rate cut.

28 March 2025 (Friday, 8.30pm SGT): US core Personal Consumption Expenditures (PCE) price index

The core PCE price index, the Fed's preferred measure for underlying inflation, rose by 0.3%, in line with market expectations. This allowed the annual rate of core PCE to ease to 2.6% from 2.9% in December, still well above the Fed's 2% target.

Fed officials have repeatedly expressed, including at this week's Federal Open Market Committee (FOMC) meeting, that they are in no rush to cut rates again as they evaluate the impact of President Donald Trump's trade and immigration policies and wait to see more progress on inflation before considering further rate cuts.

The softer-than-expected February CPI and producer price index (PPI )reports do not challenge the Fed's cautious stance on rate cuts, particularly since some softer components of the CPI release, like airfares, are not part of the Fed’s preferred inflation measure, the Core PCE Price Index.

Furthermore, some components within the CPI and PPI report were hotter than the headline suggests, heightening the risk of a hotter core PCE inflation report when it is released in two weeks' time.

The expectation is for the headline PCE Price Index to rise to 2.7% YoY and for the core measure to rise to 2.8% YoY.

The US rates market is pricing in 20 bp of Fed rate cuts for June and a cumulative 67 bp of Fed rate cuts this year.