Last week, the U.S. Federal Reserve held its March meeting, keeping the fed funds rate steady but signaling a potential start to a rate-cutting cycle this year, with projections indicating three cuts in 2024. Fed Chair Jerome Powell emphasized a gradual decline in inflation to 2%. Similarly, the Bank of Canada maintained rates amidst lower-than-expected inflation. Global central banks, including the Bank of Japan, adjusted policies, with Japan raising rates for the first time in 17 years. The Fed's dovish stance buoyed markets, with stocks and bonds rising. The Fed also upgraded U.S. economic growth forecasts, suggesting a 'soft landing.' Additionally, the Fed hinted at slowing its balance-sheet reduction program, aligning with the easing monetary policy. This dovish shift may broaden market leadership, favoring sectors like industrials and value stocks, so hopefully it stays true.
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