On Wednesday, March 18, local time, the Federal Reserve announced its interest rate decision, holding rates steady as expected. However, Governor Michelle Bowman dissented, calling for a rate cut. Following the release of the Fed's statement and before Chair Powell's press conference, major asset classes experienced limited volatility. Powell's subsequent press conference took a hawkish tone, leading to an expansion of losses in U.S. stocks, Treasury bonds, and gold, while the U.S. dollar extended its gains. The S&P 500 ultimately closed down 1.4%, marking its worst performance on a Fed decision day in 2024.
Prior to the Fed's Announcement Before the release of the March FOMC statement, U.S. stocks, Treasury bonds, gold, and digital currencies were down for the day, while the U.S. Dollar Index was higher: The S&P 500 index was down approximately 0.5% intraday, while the Nasdaq 100 index fell over 0.3%. The U.S. Dollar Index rose 0.25%, temporarily standing at 99.818 points. The yield on the 10-year U.S. Treasury note maintained a gain of 2.3 basis points, holding steady above 4.22%; the two-year Treasury yield increased by 3.8 basis points, stabilizing above 3.7%. Spot gold fell 2.3%, holding below $4,900 per ounce. Bitcoin dropped over 3%, and Ethereum declined more than 5%.
After the Fed's Announcement At 2:00 AM Beijing time, the Federal Reserve's March meeting concluded with no change to policy, as anticipated. Governor Bowman dissented, and the policy statement cited uncertainty stemming from the Middle East situation. In the period after the Fed statement's release and before Powell's press conference, major assets showed little movement, trading within a narrow range: U.S. stocks remained lower for the day, but their declines moderated in the half-hour following the decision. The two-year Treasury yield briefly fell 2 basis points, dropping below 3.69%. Spot gold held below $4,900. The U.S. Dollar Index maintained a 0.2% gain.
Powell's Press Conference During the press conference, Federal Reserve Chair Jerome Powell stated that the Fed would not cut interest rates without seeing further progress on inflation and noted that discussions about "the next step possibly being a rate hike" had been mentioned. He confirmed he would not leave his post during the survey period and would continue to serve as interim chair if a successor is not confirmed by the Senate after his term ends. Powell's hawkish tone during the press conference dominated Wednesday's market movement. As a result, losses in U.S. stocks, Treasury bonds, and gold widened, while the U.S. dollar's advance accelerated: The S&P 500 index fell over 1.1%, the Dow Jones Industrial Average dropped 718 points, or 1.5%, and the Nasdaq declined 1.2%. All 11 sectors of the S&P 500 closed in negative territory. The Biotech Index fell 1.9%, the Semiconductor Index dropped 0.2%, and the Bank Index declined 0.6%. The Hang Seng Index main overnight session closed down 1.91% at 25,479 points. The Hang Seng Tech Index main overnight session ended down 2.21% at 4,989 points. The yield on the two-year U.S. Treasury note rose 8.46 basis points, hitting a fresh daily high of 3.7581%. The 10-year yield increased by approximately 6 basis points, and the 30-year yield rose about 4 basis points. The yield on the 10-year Treasury Inflation-Protected Security (TIPS) climbed over 3 basis points to a new daily high of 1.8426%. The two-year TIPS yield rebounded from 0.34% to near 0.42%, while the 30-year TIPS yield gained over 2 basis points to 2.6213%. The U.S. Dollar Index surged over 0.5%, rising significantly during Powell's press conference to a fresh daily high of 100.110 points. The Bloomberg Dollar Spot Index advanced 0.5%, reaching a new daily high of 1213.22 points. Losses in spot gold expanded again to 3.1%, approaching the daily low of $4,834.51 per ounce set at 21:18 Beijing time. Silver prices in New York fell 6.0% on the day to $75.09 per ounce.
Charts of Major Asset Performance The following chart illustrates the movement of the S&P 500 index:
The following chart shows the 10-year U.S. Treasury yield:
The following chart displays the U.S. dollar's performance:
The following chart depicts gold's price movement:
The following chart shows Bitcoin's price movement:
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