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This week delivers market-moving updates that could set the tone for months ahead. The Federal Reserve's interest rate decision will reveal its stance amid inflation and recession fears, while U.S. GDP data will clarify whether the economy is cooling or defying expectations.
China's manufacturing PMI will offer vital clues about its post-pandemic recovery, with implications for global trade and commodities. Meanwhile, President Trump’s economic policies remain a wildcard, influencing sectors from tech to energy.
Fed to Pause in Trump’s First Term
Before we look at the stats, let's discuss what the fed rate is. The federal funds rate influences borrowing costs across the economy—lower rates encourage spending and investment, while higher rates help control inflation. Markets closely watch these decisions for their wide-ranging impact on stocks, bonds, and currencies.
The Fed is expected to hold rates steady at 4.25%–4.50%, pausing after sharp cuts in late 2024. With inflation above the 2% target and pressure from President Trump for further cuts, markets remain calm, anticipating no surprises in the decision. 
US GDP Report (January 30, 2025)
The U.S. economy showed solid growth in Q3 2024, with GDP increasing at an annualised rate of 3.1%. GDP, or Gross Domestic Product, measures the total value of goods and services produced, serving as a key indicator of economic health and trends.
The Q4 2024 report, set for release on January 30, is expected to show slower growth of around 2.3%. Economists cite high inflation and elevated interest rates as factors likely weighing on consumer spending and business activity. 
China PMI Data (January 31, 2025)
The China Manufacturing PMI, based on surveys of 3,000 companies, gauges the sector's health, with readings above 50 signaling growth and below 50 indicating contraction. It evaluates production, orders, inventories, and prices, influencing the yuan's value as it reflects economic momentum.
Recent data shows the PMI dipped from 50.3 in December 2024 to 49.1 in January 2025, signaling contraction and raising stimulus concerns. These fluctuations impact the yuan, which fell to a four-month low in December amid mixed PMI results and external pressures. The PMI remains a key indicator of China's economic trends.
That wraps up this week’s updates—be sure to check back next week for the latest and most relevant economic highlights!
IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
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