March 21, 2025: Economy Highlights

March 21, 2025: 11:00 p.m.:

The Federal Reserve announced a reduction in its monthly Treasury securities redemption limit from $25 billion to $5 billion starting in April, aiming to maintain adequate liquidity in the financial system.

New York Federal Reserve President John Williams projected a slowdown in U.S. GDP growth to 1.7% for 2025, down from the previous estimate of 2.1%, citing high economic uncertainty and reduced labor-force growth due to declining immigration rates.

U.S. stock markets closed slightly higher, ending a four-week losing streak; the S&P 500 and Dow Jones Industrial Average each edged up 0.1%, while the Nasdaq composite rose 0.5%, amid ongoing concerns over trade policies and inflation.

Fed Governor Christopher Waller opposed slowing the reduction of the Federal Reserve's balance sheet, arguing that reserve levels remain abundant at over $3 trillion and emphasizing the importance of continuing balance sheet normalization.

Analysts have reduced their first-quarter earnings forecasts for S&P 500 companies from over 11% growth to a 7.1% increase, reflecting increased pessimism due to concerns surrounding President Trump's tariffs and economic uncertainty.