All eyes on whether US Federal Reserve will make explicit promise to cut interest rates

THE mood swings of the world’s financial markets could continue if there is any ambiguity in US Federal Reserve chairman Jerome Powell’s statements this week at the end of the central bank’s two-day policy meeting.

The Fed is all but guaranteed to leave rates unchanged at current levels between 5.25 and 5.5 per cent on Wednesday (Mar 20), but it could still prove a historic meeting with a profound impact on markets if the central bank definitively tips its hand on its next move.

The outcome that the stock market bulls are counting on is an explicit – if likely tacit – promise to cut interest rates in June. Most Wall Street brokerages anticipate that will be the date for the first of…