The Federal Reserve held interest rates steady at its meeting last week, putting on hold a monetary easing cycle that saw three consecutive rate cuts late last year. The key rate remains unchanged at 3.5-3.75%.

“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the Fed said in a statement.

The AI effect: When asked about the divergence between strong GDP growth and a soft labor market during the press conference, Fed Chair Jerome Powell said it may be down to increased productivity, and that AI may have played a role. He cautioned that reading the labor market is difficult because of the unusual situation where both the demand and the supply of labor have fallen, due to lower immigration and slower job growth.

Powell is facing a barrage of attacks from the Trump administration. The war between the White House and the Fed turned into a legal showdown this month as Powell publicly attacked a DOJ probe into HQ renovations his office ordered, calling it a “pretext” for President Trump to force interest rate cuts.

The tussle saw Powell make rare political statements during the press conference. He advised the Fed chair set to replace him to stay out of elected politics and engage with Congress members on both sides of the aisle. Powell’s tenure is set to end later this year, unless Trump follows through with his wild threats and fires the independent institution’s head.

Powell also confirmed he will attend the hearing for the legal case against Fed Governor Lisa Cook, calling it “the most important legal case in the Fed’s 113-year history.” The Supreme Court will decide whether Trump can fire a Fed governor, with the ruling set to have wide implications on the Fed’s independence.

What’s next? Markets are pricing in two rate cuts this year starting in July, which means the two remaining meetings in Powell’s term are expected to stay the course.

EGX30

47,786

-0.1% (YTD: +14.2%)

USD (CBE)

Buy 46.85

Sell 46.98

USD (CIB)

Buy 46.85

Sell 46.95

Interest rates (CBE)

20.00% deposit

21.00% lending

Tadawul

11,382

-0.7% (YTD: +8.5%)

ADX

10,282

-0.8% (YTD: +2.9%)

DFM

6,435

-0.7% (YTD: +6.4%)

S&P 500

6,939

-0.4% (YTD: +1.4%)

FTSE 100

10,224

+0.5% (YTD: +2.9%)

Euro Stoxx 50

5,948

+1.0% (YTD: +2.7%)

Brent crude

USD 69.32

-0.4%

Natural gas (Nymex)

USD 4.35

+11.1%

Gold

USD 4,745

-11.4%

BTC

USD 78,178

-7.2% (YTD: -10.8%)

S&P Egypt Sovereign Bond Index

1,013

+0.1% (YTD: +2.0%)

S&P MENA bond & sukuk

151.48

-0.1% (YTD: -0.3%)

VIX (Fear gauge)

17.44

+3.3% (YTD: +16.7%)

THE CLOSING BELL-

The EGX30 fell 0.1% at Wednesday’s close on turnover of EGP 7.5 bn (35.3% above the 90-day average). International investors were the sole net buyers. The index is up 14.2% YTD.

In the green: Credit Agricole (+2.6%), Eastern Company (+2.2%), and Madinet Masr (+1.9%).

In the red: Egypt Aluminum (-3.7%), Ibnsina Pharma (-2.9%), and Rameda (-2.5%).

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