US Fed’s Kugler Watching Pickup in Prices, Inflation Expectations

Economic

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Summary:

(March 25): Federal Reserve governor Adriana Kugler expressed support for holding interest rates steady for “some time,” while highlighting a move up in some measures of Americans’ inflation expectations.

Kugler noted an uptick in goods inflation in recent months along with survey data from the University of Michigan showing a pickup in both short-run and long-run price expectations, amid heightened economic uncertainty due to President Donald Trump’s implementation of new tariffs on US trading partners and his threats to impose more.

“I am paying close attention to the acceleration of price increases and higher inflation expectations, especially given the recent bout of inflation in the past few years,” Kugler said Tuesday in prepared remarks for an event in Washington.

The University of Michigan’s preliminary March survey showed consumers expect prices to increase at an annual rate of 3.9% over the next five to 10 years, the highest in more than three decades.

Fed chair Jerome Powell at a press conference following the central bank’s meeting last week called inflation expectations “mostly well anchored” and said the University of Michigan figures were an “outlier” compared to other assessments of longer-run inflation expectations.

At that meeting, the Federal Open Market Committee left its benchmark policy rate unchanged in a range of 4.25% to 4.50%, a level Kugler said Tuesday she sees as continuing to have a restrictive effect on the US economy.

“I judge that FOMC policy is well positioned,” Kugler said. “The committee can react to new developments by holding at the current rate for some time as we closely monitor incoming data and the cumulative effects of new policies.”

Goods inflation

Kugler also said that progress on continuing to lower inflation from the multi-decade highs reached in 2022 “has slowed since last summer,” adding that some categories of prices are seeing evidence of a re-acceleration in recent months.

“Importantly, while goods inflation was negative in 2024 — as was the norm before the pandemic — it has turned positive in recent months,” she said. “This development is unhelpful because goods inflation has often kept a lid on total inflation and also affects inflation expectations.”

She noted recent data on economic activity had “shown some signs of softness,” like a decline in retail sales in January, but added it may reflect factors such as weather disruptions and seasonal adjustment issues. She described the labour market as stable.

Source: Theedgemarkets

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Economic

Forex

U.S. business activity growth accelerated in March, but expectations for the year ahead fell to their second-lowest level since October 2022 in a sign of increasing worry among companies about the broader economic outlook.

Improved weather powered an uptick in the key U.S. services sector, which helped to mitigate a renewed decline in manufacturing output. Factories reported fewer instances of activity having been buoyed by the front-running of anticipated tariffs, S&P Global data showed on Monday.

Firms had been pushing earlier in the year to lock in orders prior to the implementation of potential sweeping tariffs on friends and adversaries alike by U.S. President Donald Trump. Businesses and economists have both flagged worries that the levies could refuel inflation pressures and potentially dent wider growth.

Still, the flash estimate for S&P Global’s U.S. composite purchasing managers’ index, a tracker of the manufacturing and services sectors, rose to a three-month high of 53.5 in March. The figure stood at 51.6 in February. A level above 50 indicates expansion.

The number showed that the economy had regained some momentum following a patchy first quarter of 2025 that was also impacted by inclement weather.

Yet business confidence was dour, slumping to its lowest point bar pre-election jitters last September.

Sentiment has "[soured] further from the buoyant mood seen at the start of the year to one of the gloomiest readings seen over the past three years, largely caused by growing worries over negative impacts from recent policy initiatives from the new administration," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

"A key concern over tariffs is the impact on inflation, with the March survey indicating a further sharp rise in costs as suppliers pass tariff-related price hikes on to U.S. companies."

S&P Global’s measure of prices paid by companies for inputs rose to 60.9, the highest mark since April 2023 and up from 58.4 in February. Manufacturing businesses are increasingly passing these higher expenses onto customers, although services inflation remains relatively subdued, Williamson noted.

"[B]ut this reflects the need to keep prices low amid weak demand, which will harm profits," Williamson said.

The data comes after the Federal Reserve left interest rates unchanged at its latest policy meeting, but raised its expectations for inflation and lowered its growth forecasts.

Source: Investing

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Warren Takunda

Cryptocurrency

Bitcoin delivered its best weekly performance in over two months, climbing 4.24% to an intra-day high at $88,804. BTC also reclaimed a bullish stance on the charts, closing above the daily chart’s 200-day exponential moving average (EMA). Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst_1

Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst_1

Bitcoin 1-day chart. Source: Cointelegraph/TradingView

With a weekly close above $84,600, the likelihood of BTC testing $90,000 increases. However, BTC price must overcome the descending resistance level to make a sustainable move at the range highs.

Bitcoin correction is a “healthy pause”

Bitcoin researcher Axel Adler Jr. explained that based on onchain metrics, the current price cycle reflects a healthy consolidation rather than the beginning of a bear market. Adler Jr. noted that BTC has not yet entered “overheated” territory in this cycle, as indicated by BTC’s Investor Price Model.

This metric flashed a sell signal twice during 2021, and the model incorporates the realized cap, thermo cap, investor price, and Bitcoin supply.

Using Bitcoin’s cumulative value days destroyed (CVDD), Adler argued that the market remains in a “growth stage.” Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst_2

Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst_2

Bitcoin cumulative value days. Source: adlercryptoinsights / Substack

The CVDD metric monitors selling activity among long-term holders. The current bull cycle (2024-2025) triggered a sell signal just once, back in March 2024. In a Substack article, Adler said:

“Considering the current market dynamics, we might see seasoned investors taking profits once Bitcoin breaches key peak levels ($123K), potentially exerting downward pressure on the price.”

From the above analysis, Adler Jr. predicted that Bitcoin could climb to $130,000 within 90 days.

Bitcoin open interest jumps $1.5 billion in 24 hours

According to Velo data, Bitcoin's open interest (OI), representing the total value of outstanding futures contracts, jumped by over $1.5 billion in the last 24 hours.

Meanwhile, the funding rate, which reflects the cost of holding leveraged positions, stayed near neutral. This suggests that neither bullish (long) nor bearish (short) traders were dominantly in control. Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst_3

Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst_3

Bitcoin price and aggregated open interest. Source: Velo.chart

Bitcoin experienced a surge in upward momentum late on Sunday, March 23rd. Weekend price rallies like this often occur with lower trading volume, as larger market participants tend to step back until the start of the week. In such a scenario, leveraged trades amplifying the action could heavily influence the price movement.

In an X post, anonymous crypto analyst IT Tech PL also pointed out the OI level rise after BTC exceeded $87,500. However, the analyst added:

“But here’s the catch: High OI + Rapid Price Increase = Risk of Liquidation Cascades!” Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst_4

Bitcoin 4-hour chart. Source: Cointelegraph/TradingView

From a technical perspective, Bitcoin registered a new high at $88,750 over the previous week’s top. However, as the chart exhibited, the price tested the upper Bollinger Band alongside the descending resistance. Additionally, BTC is also oscillating within an ascending channel.

Based on the above confluence, BTC could witness a short-term correction to test the demand zone around $86,000-$87,000 before breaking through the $90,000 threshold.

Source: Cointelegraph

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Warren Takunda

Economic

Treasury has largely declared victory in the protracted battle to tame inflation without tanking the economy, with the budget papers predicting the country will complete its “soft landing” by the middle of this year.

The latest forecasts show the rate of underlying inflation – taking into account the flattening effects of energy rebates – will be “sustainably” within the Reserve Bank’s 2-3% target range by June and six months earlier than expected.

It is a story Jim Chalmers has been keen to sell as he attempts to convince voters not to dwell on what has been a difficult three years.

“The intersection of inflation down, wages up [and] tax cuts … is driving the recovery in household incomes and living standards, and that’s feeding this broader recovery in the economy,” the treasurer told Guardian Australia.' Chalmers Confident Australian Economy Has ‘Turned the Corner’ in Battle Against Inflation_1

Chalmers Confident Australian Economy Has ‘Turned the Corner’ in Battle Against Inflation_1

Headline inflation is now expected to be 2.5% in the year to June – a quarter of a percentage point lower than forecast in December.

In a prediction that will add to calls for another interest rate cut at the central bank’s meeting next week, the budget papers show unemployment is set to remain at about 4.25% over the coming years, rather than rising to 4.5%.

The jobs market again outperformed expectations, helping to swell the government’s coffers, but not by enough to meaningfully improve the bottom line over the coming years.

The budget predicts a string of deficits stretching for a decade, starting at a slightly larger $27.6bn estimated underlying cash deficit for 2025-26. The deficit will then expand to $42.1bn in 2026-27, before averaging about $36bn over the following three financial years.

In contrast to previous budgets where Labor has banked the vast majority of revenue upgrades, the Albanese government’s final budget before the election shows only a $1.6bn improvement in the expected bottom line over the five years to 2028-29.

While Chalmers has been careful not to declare mission accomplished in the battle against inflation, the budget papers reinforce his narrative that the economy has “turned the corner”.

The government can point to inflation more than halving since it took office in 2022, but the high cost of living – including essentials such as groceries, insurance, rents and electricity – remains a defining issue for the budget and the upcoming election.

The 2025-26 budget remained squarely focused at delivering cost-of-living relief to as many Australians as possible.

In addition to a previously announced $8.5bn boost to Medicare and an additional $1.8bn in energy bill relief, Labor delivered a surprise $17.1bn in tax cuts by reducing the lowest rate from 16% to 14% over two years, starting from mid-2026.

Chalmers said the decision to delay the start of tax cuts to next year in part reflected a wariness about the risk of reigniting price pressures.

“On the timing, we are doing what we can afford,” he said. “We want to make sure that the tax cuts we commit to, we are doing that in a responsible way. And we are sequencing it so they come in the middle of next year when the expectation is that inflation will be sustainably within the band.”

After successfully navigating the post-pandemic inflationary surge, Australia now faces the risk of a global trade war that may define the global economy over coming years.

In a worst-case scenario where the US imposes a 25% import tariff on all “‘durable” goods such as steel and aluminium, and then the world retaliates with similar taxes, modelling in the budget papers finds the hit to Australia’s GDP by 2030 would be 0.2% of GDP.

Despite this relatively sanguine estimate, Guardian Australia understands Treasury officials remain deeply concerned about the threat to the global economy from rising protectionism.

“Cost-of-living pressures are still there, although easing in welcome and encouraging ways. But also there’s global economic uncertainty,” Chalmers said.

“So the best way to deal with those two things simultaneously: first of all, rebuild living standards and incomes, as we are doing. And secondly, make our economy more resilient (via measures such as) future made in Australia, competition reform, all of those pieces.”

Source: Theguardian

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Economic

In a Truth Social post, Trump said Venezuela has been "very hostile" to the US and countries purchasing oil from it will be forced to pay the tariff on all their trade to the US starting April 2.

The tariffs would most likely add to the taxes facing China, which in 2023 bought 68% of the oil exported by Venezuela, according to a 2024 analysis by the US Energy Information Administration. Spain, India, Russia, Singapore and Vietnam are also among the countries receiving oil from Venezuela, the report shows.

But even the United States — despite its sanctions against Venezuela — buys oil from that country. In January, the United States imported 8.6 million barrels of oil from Venezuela, according to the Census Bureau, out of roughly 202 million barrels imported that month.

And on Monday, the Treasury Department issued an extension for US-based Chevron Corp.'s lease to pump and export Venezuelan oil until May 27. The extension, known as a general license, exempts the country from economic sanctions and allows it to continue to pump oil.

In February, Trump announced an end to the Chevron-Venezuela relationship, in what became a financial lifeline for the South American country.

Venezuelan President Nicolás Maduro responded by accusing the US of violating international trade rules with an "arbitrary, illegal and desperate measure" designed to "undermine the development" of the South American nation.

"For years, the fascist right, repudiated by the Venezuelan people, has promoted economic sanctions with the hope of bringing Venezuela to its knees," the government said in a statement. "They failed because Venezuela is a sovereign country, because its people have resisted with dignity, and because the world no longer submits to any form of economic dictatorship."

The US president is arguing that tariffs will bring back manufacturing jobs, rather than worsen inflationary pressures and hinder growth as economists have warned. His latest anecdotal evidence came Monday as Hyundai announced at the White House that it would build a $5.8bn (€5.4bn) steel plant in Louisiana.

"This investment is a clear demonstration that tariffs very strongly work," said Trump, adding that the new plant by the South Korean automaker would create 1,400 jobs.

Hyundai Motor Group's executive chairman, Euisun Chung, told the president: "We are really proud to stand with you and proud to build the future together."

A bolder move against China?

Trump's latest tariffs threat suggests the administration may be willing to take bolder moves against China in its efforts to rewrite the guidelines of the global economy. The Trump administration has already levied universal 20% tariffs on imports from China as an effort to crackdown on the illicit trade in fentanyl, but another 25% import tax on top of that could further escalate tensions between the world's two largest economies.

Trump said Venezuela will face a "Secondary" tariff because it is the home to the gang Tren de Aragua. The Trump administration is deporting immigrants that it claims are members of that gang who illegally crossed into the United States.

Trump has labelled April 2 as "Liberation Day" based on his still unclear plans to roll out import taxes to match the rates charged by other countries, as well as fully levy 25% tariffs against Mexico and Canada, the two largest US trading partners. The Republican president has also increased his 2018 tariffs on steel and aluminium to 25% for all imports and has committed to additional tariffs on autos, pharmaceutical drugs, lumber, computer chips and copper.

The US stock market had been climbing on Monday as investors expect the tariffs to be more targeted than they earlier feared. Still, the S&P 500 index is down so far this year out of concerns that a trade war could hinder economic growth and increase inflationary pressures.

But Trump has been somewhat closely guarded about his plans for tariffs, saying Monday that even though he wants to charge "reciprocal" rates that "we might be even nicer than that."

Source: Euronews

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Stocks

Shares were mixed in Asia on Tuesday, with Chinese markets retreating, following a broad rally on Wall Street fueled by hopes the Trump administration may take a more targeted approach as it tees up a new round of tariffs on imported goods next week.

U.S. futures edged lower and oil prices were little changed.

Tokyo’s Nikkei 225 gained 0.5% to 37,780.54, while the Kospi in South Korea lost 0.6% to 2,615.81.

Hong Kong’s Hang Seng sank 2.1% to 23,402.56 as heavy selling of tech-related shares pulled the benchmark lower.

Cell phone maker Xiaomi’s Hong Kong-traded shares dropped 5.9% and delivery app company Meituan lost 4.2%. E-commerce giant Alibaba was down 3.5%.

The Shanghai Composite index was unchanged at 3,369.98.

Taiwan’s Taiex gained 0.8% and the SET in Thailand lost 0.5%.

Stocks have been riding waves of hope and worry as President Donald Trump has announced and then amended plans on higher tariffs. A new round of tariffs is scheduled for April 2, but Trump has been somewhat closely guarded about his plans, saying Monday that even though he wants to charge “reciprocal” rates — import taxes to match the rates charged by other countries -- that “we might be even nicer than that.”

Other comments have provided less reassurance and in recent days, Chinese markets that had been riding high have pulled back. In a Truth Social post, Trump said Venezuela has been “very hostile” to the U.S. and countries purchasing its oil will be forced to pay a 25% tariff on all exports to the U.S. starting April 2.

That would likely more than double the already high tariffs facing China, which in 2023 bought 68% of the oil exported by Venezuela, according to a 2024 analysis by the U.S. Energy Information Administration. The U.S. also imports oil from Venezuela.

On Monday, the S&P 500 jumped 1.8%. to 5,767.57, while the Dow Jones Industrial Average rose 1.4% to 42,583.32. The Nasdaq composite closed 2.3% higher, at 18,188.59.

Despite the gains, the benchmark S&P 500 has lost 1.9% so far this year out of concerns that a trade war could hinder economic growth and increase inflationary pressures.

Gains on Monday were broad, with 84% of stocks within the S&P 500 ending higher. Nearly every sector within the index rose.

Technology stocks helped lead the way. The stocks are among the most valuable on Wall Street and tend to have an outsized impact on the broader market’s direction.

Nvidia rose 3.2% and Apple added 1.1%.

Tesla climbed 11.9% for the biggest gain among S&P 500 stocks. The electric vehicle maker is still down about 31% for the year.

Wall Street has several economic updates this week. Business group The Conference Board releases its consumer confidence survey for March on Tuesday. On Friday, the U.S. government releases the personal consumption expenditures price index for February, a measure of inflation closely watched by the Federal Reserve.

The Fed started cutting its benchmark interest rate at the end of 2024 but is cautious about inflation, which is just above its 2% goal. Those cuts came after the central bank raised interest rates in order to cool inflation from a two-decade high.

Lower interest rates can ease borrowing costs and help give the economy a boost, but they can also push inflation higher.

In other dealings early Tuesday, U.S. benchmark crude oil rose 13 cents to $69.24 per barrel. Brent crude, the international standard, climbed 13 cents, to $72.50 per barrel.

The U.S. dollar fell to 150.59 Japanese yen from 150.70 yen. The euro rose to $1.0803 from $1.0802.

Source: AP

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Economic

Asian stocks stumbled on Tuesday, dragged by a slide in Chinese tech shares after a strong rally, while investors weighed the prospect of narrower-than-feared U.S. tariffs and the dollar hovered near three-week highs after upbeat economic data.

Investors have been focused on the impending reciprocal tariffs promised by U.S. President Donald Trump and its impact on the global economy as trade war fears grip markets.

Trump said on Monday automobile tariffs are coming soon even as he indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks, suggesting some room for negotiations.

That led to an exuberant risk-on reaction overnight. The S&P 500 closed at its highest in over two weeks, while a rally in tech stocks led Nasdaq up over 2% on Monday.

Asian stock bourses initially joined in on Tuesday morning but by mid-afternoon the relief rally looked set to fizzle out. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.35% lower ahead of European open.

European futures were down 0.24%, while S&P 500 and Nasdaq futures inched lower.

Charu Chanana, chief investment strategist at Saxo, said the high degree of uncertainty would make business planning extremely difficult.

"While markets can react to every tariff headline, businesses cannot. Businesses need clarity - and the lack of it could weigh on earnings soon," Chanana said.

Kyle Rodda, senior financial markets analyst at Capital.com, said there was still a need to see the full detail of what the tariffs would entail, and whether they represented the full extent of the Trump administration's "bid to shake up the global trading system."

"I don't think we are out of the woods completely yet."

Hong Kong's Hang Seng index fell 1.8%, as tech stocks led a broad selloff, with Xiaomi's $5.5 billion upsized share sale triggering concerns about stretched valuations across the market.

"Xiaomi's placement is only an 'excuse' for the market decline in general, after this round of a 6,000-point rally," said Steven Leung, director of institutional sales at UOB Kay Hian in Hong Kong, referring to strong rally in Hang Seng this year.

The Hang Seng is up 17% this year, still the best-performing major stock market in the world on AI bets after startup DeepSeek's sparkling debut.

DATA LIFTS DOLLAR

The dollar hit a three-week high against the yen at 150.95, after jumping 0.9% in the previous session, while hovering at its strongest since March 6 at $1.0781 per euro after stronger-than-expected U.S. economic data.

Data showed S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. A reading above 50 indicates expansion in the private sector.

The PMI would suggest the economy was regaining speed after hitting a soft patch halfway through the first quarter. But so-called hard data, including retail sales and the employment report, have hinted at cracks in the foundation of the economy.

The strong dollar also cast a shadow across emerging markets. Indonesian rupiah sank to its lowest level since June 1998 during the Asian financial crisis on mounting concerns over the country's fiscal health.

Investor attention will now be on the size of the reciprocal tariffs to be announced next week as well as which countries will be targeted by the Trump administration.

Oil prices were little changed on Tuesday after rising 1% in the previous session as investors weighed the impact of Trump's announcement of tariffs on countries buying oil and gas from Venezuela.

Brent crude futures were up 2 cents at $73.02. U.S. West Texas Intermediate crude futures was flat at $69.11.

Gold was steady at $3,015.87 per ounce after a Federal Reserve official signalled a cautious stance on interest rate cuts this year.

Source: Reuters

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US Fed’s Kugler Watching Pickup in Prices, Inflation Expectations

Goods inflation

Source: Theedgemarkets

U.S. Business Activity Accelerates in March, But Outlook Remains Downbeat

Source: Investing

Will Bitcoin Price Hit $130K in 90 Days? Yes, Says One Analyst

Bitcoin 1-day chart. Source: Cointelegraph/TradingView

Bitcoin correction is a “healthy pause”

Bitcoin cumulative value days. Source: adlercryptoinsights / Substack

Bitcoin open interest jumps $1.5 billion in 24 hours

Bitcoin price and aggregated open interest. Source: Velo.chart

Bitcoin 4-hour chart. Source: Cointelegraph/TradingView

Source: Cointelegraph

Chalmers Confident Australian Economy Has ‘Turned the Corner’ in Battle Against Inflation

Source: Theguardian

The US Will Put a 25% Tariff on Countries That Buy Venezuelan Oil

A bolder move against China?

Source: Euronews

Stock Market Today: Asian Shares Mixed, Chinese Markets Decline After Rally on Wall St.

Source: AP

Asian Stocks Waver as Tariff Worries Linger; Dollar Perks Up

DATA LIFTS DOLLAR

Source: Reuters

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