Good morning. Here's what happened overnight and what you need to know today.
1.
Rate hold: The Federal Reserve maintained interest rates at 5.25% to 5.5% and signalled fresh concerns about persistent inflation, reaffirming the need for more evidence that price gains are cooling before considering rate cuts. The Fed noted that while job gains have remained strong and the economy has expanded at a solid pace, inflation has stalled in its progress toward the 2% goal. While slowing the pace of its balance sheet runoff, the central bank emphasised the need for more evidence that inflation is cooling before considering rate cuts. Inflation in the US slowed late last year, but progress has come to a standstill in 2024 amid a strong labour market, robust wage growth, solid economic expansion, and steady consumption and investment. In his address, Fed chair Jerome Powell underscored that rates will likely remain higher for longer. However, he also signalled that rate hikes are unlikely. (Bloomberg)(Financial Times)
2.
Sanction avalanche: The US imposed harsh new sanctions on over 300 Russian and international entities, including nearly 20 companies in China and others in Turkey, for providing critical military support and enabling circumvention of existing penalties against Russia's war effort in Ukraine. The sweeping measures targeted Chinese companies that allegedly supplied Russia with drone components, military optics, weapons, ammunition and other restricted technology. It also sanctioned two Chinese groups that exported nitrocellulose, a gunpowder and rocket propellant ingredient, to Russian importers. The crackdown follows warnings from Treasury Secretary Janet Yellen and Secretary of State Antony Blinken about consequences for Chinese firms backing Moscow's military. Companies linked to Russian chemical and biological weapons were also sanctioned as the US rushes USD60 billion ($92.3 billion) in new Ukraine aid. (Financial Times)(Reuters)
