Macro
The Bank of England decided to keep UK interest rates on hold at 4.5%, citing global uncertainty and stable inflation expectations despite slightly slowing economic growth. The decision reflects concerns about inflation risks and trade conflicts, with policymakers preferring a cautious approach to further rate cuts. Market predictions now indicate the next rate cut might not occur until August.
U.S. stock indices concluded the week with gains, ending a series of multi-week declines while large-cap technology stocks underperformed, causing the Nasdaq Composite to lag behind other major indices.
The Federal Reserve held interest rates steady within the range of 4.25%–4.5%. Policymakers signaled a cautious stance, projecting rate cuts later in the year but simultaneously revising their inflation forecasts upwards. February retail sales figures came in weaker than expected, reflecting softer consumer spending, although the housing market data painted a more resilient picture with a notable increase in existing home sales and housing starts.
European markets faced headwinds driven by caution around U.S. monetary policy and broader economic uncertainty. Investor confidence was further tested by continuing trade tensions, especially given recent tariff developments.
Conversely, Asian equities generally fared better, particularly in Japan, where the Bank of Japan’s continued accommodative monetary policy and the weakening yen supported export-driven sectors. China experienced modest gains amid mixed economic data, underpinned by government efforts to stabilize growth amid external challenges.
In fixed-income markets, U.S. Treasury yields broadly declined following the Fed’s dovish signals, supporting bond prices. Investment-grade corporate and municipal bonds also performed positively, buoyed by narrowing spreads and robust demand.
