By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Financial Industry and Financial Markets
Like most of its central banking peers, the Federal Reserve will likely sit on its hands at this week’s meeting, blinded by the multiple crosswinds from U.S. economic policy upheaval and plans for sweeping tariff hikes.
Despite all the policy fog and market shifts, though, one thing hasn’t changed over the past month: investors still think the big tech trade is too crowded. I’ll discuss this and the rest of today’s market news below.
Today’s Market Minute
* Several U.S. national security agencies have suspended certain efforts to counter Russian sabotage, disinformation and cyberattacks, potentially lifting some pressure off Moscow, according to Reuters exclusive reporting.
* A U.S. federal judge has blocked billionaire Elon Musk and DOGE from taking any more steps to shut down the U.S. Agency for International Development, saying their efforts to close the foreign aid agency were likely unconstitutional.
* Tumbling stock markets and signs of tightening credit may make the Federal Reserve’s job even more difficult as policymakers zero in on consumer spending.
* Russian President Vladimir Putin has agreed to a temporary halt to attacks on Ukrainian energy facilities, but stopped short of backing a 30-day ceasefire following a phone call with Donald Trump.
* The Bank of Japan has kept interest rates steady, as its policymakers buy themselves time to figure out how the prospect of higher U.S. tariffs might affect their country’s export-focused economy.
Policy fog forces Fed to the sidelines
Wall Street stocks had another bruising day on Tuesday, led by further sharp losses for the Big Tech megacaps. This contrasted with the strong gains in Europe and Hong Kong, as global investors continue to frantically rotate their equity portfolios.
Germany’s defence push and gigantic fiscal stimulus got the green light from the Bundestag on Tuesday and is set to pass the upper house of parliament by the weekend.
But most markets around the world stalled out on Wednesday, likely because investors are waiting to hear if central banks can see anything through the fog.
While Fed watchers expect no policy change from Chair Jerome Powell and team later on Wednesday, all eyes will be on the updated quarterly economic and rate projections.
Right now, futures have little more than two Fed rate cuts priced by yearend – essentially what the Fed had indicated three months ago – and the next move is not expected until June or July.
