The Week of March 10, 2025

Looking at the economic calendar ahead for this week, the most important things that we will be watching are the CPI numbers on Wednesday in the United States and the PPI numbers on Thursday, also from the United States. Ultimately, a lot of people are wondering whether or not the Federal Reserve will be forced to cut multiple times this year or whether they will be hesitant.

It was not that long ago that one interest rate cut was expected from the Federal Reserve in 2025, but recently we have seen market price in the idea of 3 interest rate cuts. Whether or not that actually happens remains to be seen, but it is something worth watching. For those of you who are unfamiliar, the CME has what is known as the “FedWatch Tool.” This gives you an idea of what traders think is going to happen going forward. I highly recommend paying close attention to this, because it can give you an idea as to how the US dollar could behave. You will notice the chart below suggesting that interest rates are going to drop throughout the year in a gradual manner, and most traders, denoted by the blue squares, think that we will be dropping multiple times this year. While I don't necessarily agree with them, this remains to be seen.

Because of this, I am going to be paying close attention to the Core CPI on Wednesday, expected to be 0.3% month over month. However, if that surprises people, it could cause a bit of a headache. On Thursday, I'll be watching the Core PPI month-over-month numbers, expected to be the 0.3% as well. If these come in hotter than anticipated, it could very well lift the US dollar.

Dollar Oversold?

One thing that I find interesting is that the British pound, the Swiss franc, and the euro all look a little exhausted against the US dollar. I think that the CPI numbers that I spoke about previously could be what determines where this market goes next. The US dollar has been sold off quite viciously as of late, but you should recognize that a lot of this comes down to yield spiking in Germany, at least in the case of the euro. After all, Germany's talking about retooling its military and selling a ton of bonds, which drives yields down. In the short term, that helps the value of the euro.


However, we could start to see a bit of a "fear-based trade," and that typically will favor the US dollar. I have no interest in trying to be the first one buying the US dollar, but if so CPI numbers tip the scales, then I think you could see currency pairs such as the EUR/USD get pummeled in the short term.

While the euro looks a little stretched, what I find interesting is that if you measure gold in euros, it also looks like the gold market is going to turn around against the common currency, meaning that the euro may be getting close to the end of its run higher, at least for the short term.

At this point, the market is likely to continue to be very noisy, and you should probably pay close attention to the euro, mainly because it's one of the biggest "anti-US dollar" trades out there.

Indices Conitnue to Be Dangerous

At this point in time, I would be very cautious about jumping into the US stock market. I would even say the same thing about most indices, although European indices seem to be doing fairly well. Nonetheless, there are a whole plethora of problems out there that I think need to be paid close attention to, not the least of which would be the fear from tariff wars globally.


Don't get me wrong, I think it's all bullshit. However, Wall Street loves drama, and they will of course dump stocks as soon as they can. We could be heading into a recession, and quite frankly I think the United States needs one. We had gotten a bit too frothy when it comes to risk appetite, and a recession is a way to "cleanse the economy.” This of course assumes that it does happen, and it's probably worth noting that the Atlanta Federal Reserve has suddenly gotten apocalyptic with its projections. You can see them revise their numbers down almost as soon as the executive branch changed at the beginning of the year. To say the Fed isn't political is a joke, so one would assume sooner or later Trump will apply pressure as well.


That being said, even Donald Trump admits that a recession could very well happen, and as a result, I think everybody's freaking out. Quite frankly, presidents just don't say this. However, he insists on looking at the long term, which is something that people didn't expect. Ultimately, this is why the United States will stand head and shoulders over most economies, but it is worth noting that the next couple of weeks could be very difficult in the United States, so therefore I am not a big trader of indices at the moment.


As I write this on Monday, the S&P 500 is melting down, and I think you will probably continue to see this be the case. We are well below the 200 Day EMA, and technical traders are now starting to panic a bit. I think we have further downside to go, but I also recognize that it is these moves that allow you to step in and buy the S&P 500 and ride it for ages on the bounce. We are there yet, but I will keep you informed as to when things start to change.

Trade well,

Chris