The Day at a Glance | March 14 2025

The Top

● The Federal Reserve will face a difficult decision innext week’s meeting.

● The Central Bank of Mexico warned that the country´seconomy could feel the effects of global volatility, driven by risks such as U.S. trade policies and potential new tariffs.

● ECB President Christine Lagarde warned on Friday that a large-scale global trade war would particularly impact the U.S. and could revitalize Europe’s push for greater integration.

● The U.S. Senate is set to approve a stopgap spending bill on Friday to avert a partial government shutdown after Democrats backed down in a standoff triggered by dissatisfaction with President Donald Trump’s campaign to shrink the federal workforce.

● The U.K.´s economy unexpectedly contracted in January, extending a series of uneven data releases that have complicated Finance Minister Rachel Reeves’ efforts to boost growth.

● According to Reuters, the Bank of Japan will keep interest rates unchanged next week and discuss the impact of the escalating U.S. trade war on its export-dependent economy, a key factor in determining the timing of its next rate hike.

● Russian President Vladimir Putin sent a message to Donald Trump regarding his ceasefire proposal for Ukraine through Trump’s special envoy, the Kremlin said on Friday, adding that it saw grounds for “cautious optimism” about reaching a deal.

● Oil prices rebounded on Friday after falling more than 1% in the previous session, partly due to fading expectations of a swift end to the war in Ukraine.

Economic Environment

The Federal Reserve will face a difficult decision in next week’s meeting. While inflation has continued to ease and employment remains strong, economic uncertainty has risen due to shifts in the Trump administration’s economic policies. In this context, the new U.S. tariffs and retaliatory measures from other countries pose inflationary risks, while declining business and consumer confidence, coupled with financial market volatility, suggest a potential economic slowdown. Fed Chair Jerome Powell has emphasized that his role is not to “criticize or praise” government decisions but to manage their effects. However, he acknowledged that the outlook has changed significantly since the last meeting in January, and risks that were previously speculative are now more tangible. Notably, Powell also recently stated that the Fed is closely monitoring the combination of persistent inflation and the unexpected weakening of the labor market, reinforcing the current monetary policy dilemma. On one hand, the Fed may choose to keep rates elevated to prevent tariffs and other supply shocks from fueling inflation. On the other, signs of slowing consumption and investment could justify rate cuts to support economic activity. While investors expect the Fed to hold rates steady in March, the new economic forecasts will be key in determining the future direction of monetary policy. With mixed signals and risks on both sides, the decision will not be an easy one.

Markets and Companies

Main U.S. indices were trading in positive territory this morning as investors remained focused on ongoing negotiations between the U.S. and Russia over a potential ceasefire in Ukraine. While the Kremlin expressed support for the U.S.-led ceasefire proposal, uncertainties remain in place regarding the terms and conditions that could hinder a final agreement.

In Europe, markets were also positive, driven by the technology and consumer sectors, though the possibility of new tariffs between the U.S. and the EU is prompting caution. Meanwhile, Asian markets closed higher.

In the commodities market, oil was rebounding as uncertainty surrounding the Ukraine conflict and the impact of sanctions on Russia continued to influence prices. Gold, on the other hand, hit a new all-time high, surpassing $3,000 per ounce, solidifying its role as a safe-haven asset amidstglobal uncertainty and expectations of lower interest rates in the U.S.

In fixed income, the yield on the 10-year U.S. Treasury note rose to 4.31%, while the 2-year yield stood at 3.98%.

Lastly, the IPC was trading slightly higher at 52,016.2 points. Meanwhile, the exchange rate stood at 19.94, compared to 20.09 in the previous session.

Corporate News

• An American Airlines plane made an emergency landing in Denver due to an engine failure, which caught fire while the aircraft was taxiing to the gate. Passengers were immediately evacuated, and twelve were hospitalized for evaluation. The FAA is investigating the incident, adding pressure on the airline amidstrecent operational issues.

• BMW reported a 36.9% drop in its 2024 net profits, reaching €7.68 billion, in line with expectations. The company attributed the decline to weak demand in China, one of its key markets, and supply chain disruptions. For 2025, the automaker anticipates a negative impact from the tariffs imposed to date.