March 19 Overseas Market Headlines: The Federal Reserve Maintains Interest Rates, Milan Votes Against Again, Powell Denies that the US Economy Is in Stagflation, Trump Grants a Temporary Waiver of the Jones Act

Major headlines that the global financial media focused on last night and this morning:

1. One article to understand | Federal Reserve keeps interest rates unchanged; Milan votes against; Powell denies the U.S. is in stagflation

2. U.S. Producer Prices Rise More Than Expected in February; Iran War Could Accelerate Inflation

3. Trump Temporarily Exempts the Jones Act to Address Domestic Energy Price Surge

4. Micron Technology Reports Optimistic Revenue Outlook; AI Boom Continues to Drive Demand for Storage Chips

5. Bypassing the Strait of Hormuz, Saudi Arabia Restores Over 50% of Oil Exports

6. Experts Say U.S. Strikes on Iran May Only Last a Few Days or Weeks

One article to understand | Federal Reserve Continues to Hold Interest Rates Steady; Milan Votes Against; Powell Denies U.S. Is in Stagflation

On March 11, local time, the Federal Reserve kept the target range for the federal funds rate unchanged at 3.50% to 3.75%, maintaining the median expectation of one rate cut this year. The voting result was 11-1, with Governor Stephen Miller voting against, calling for a 25 basis point cut.

Federal Reserve Chair Jerome Powell stated at the post-meeting press conference that they would consider a rate cut only if inflation shows sustained progress. He expects inflation to continue to decline but at a rate less than previously anticipated.

He denied that the U.S. economy is currently in stagflation and said that the term would only be used if the economic situation were much more severe.

U.S. Producer Prices Rose More Than Expected in February; Iran War Could Accelerate Inflation

U.S. producer prices saw their largest month-over-month increase in seven months in February, driven by rising prices in services and various goods. The ongoing Middle East war has pushed oil prices higher, and the pass-through effects of tariffs may further accelerate the rise.

The U.S. Department of Labor released a Producer Price Index (PPI) report on Wednesday that exceeded expectations, indicating that the key inflation indicator used by the Fed rose significantly in February. The Fed concluded a two-day policy meeting on Wednesday, keeping rates steady, with policymakers expecting inflation to climb, unemployment to remain stable, and only one rate cut this year.

Data from the London Stock Exchange Group (LSEG) shows that financial markets expect the Fed to resume rate cuts either in December this year or January 2027.

Trump Temporarily Exempts the Jones Act to Address Domestic Energy Price Surge

White House Press Secretary Karine Jean-Pierre announced that President Trump has issued a temporary waiver of the Jones Act to reduce shipping costs for domestic maritime cargo, aiming to mitigate the impact of rapidly rising energy prices.

Meanwhile, the American Automobile Association (AAA) reports that the national average gasoline price has risen to $3.842 per gallon, up sharply from $2.923 a month ago.

The Jones Act (officially the Merchant Marine Act of 1920) requires that ships transporting cargo between U.S. ports be built in the U.S., owned by U.S. entities, fly the U.S. flag, and be crewed by Americans. These strict requirements significantly increase domestic maritime shipping costs.

Micron Technology Reports Optimistic Revenue Outlook; AI Boom Continues to Drive Demand for Storage Chips

Micron Technology, the largest U.S. manufacturer of computer memory chips, issued an optimistic outlook for the current quarter following a surge in storage chip prices.

In a statement on Wednesday, the company projected third-quarter revenue of approximately $33.5 billion, well above analysts’ average estimate of $23.7 billion. After excluding some items, earnings per share are expected to be about $19.15, higher than the expected $11.29.

The demand for AI computing power has led to supply shortages, causing storage chip prices to soar. High-bandwidth memory, crucial for training and running AI models, is vital for data transfer in the main chips.

Bypassing the Strait of Hormuz, Saudi Arabia Restores Over 50% of Oil Exports

Despite disruptions caused by the Iran war, Saudi Arabia’s oil exports have recovered to over half of normal levels, indicating that the country’s contingency plan to bypass the Strait of Hormuz is beginning to work.

With the Strait nearly paralyzed, Saudi Arabia is rerouting crude oil through a 1,200-kilometer (746-mile) pipeline to the western port of Yanbu. At the same time, Saudi has quickly assembled a large fleet of oil tankers heading to the Red Sea to load oil, currently gathering around the port.

Tracking data shows that over the past five days, Yanbu’s oil shipments averaged about 4.19 million barrels per day, a significant portion of Saudi’s pre-war daily exports of around 7 million barrels, and far above the previous level of about 1.4 million barrels transported through that port.

Experts Say U.S. Strikes on Iran May Only Last a Few Days or Weeks

Seth Jones of the Center for Strategic and International Studies (CSIS) stated that before the latest strikes on Iran, U.S. supplies of key long-range and defensive munitions were already low, which might force Washington to reduce its involvement in the conflict.

Jones said these constraints could help shorten the current phase of the war involving direct U.S. military action, but he expects Israel to continue conducting phased strikes on Iran as needed.

“We’re talking about a few days or weeks,” Jones said in an interview. “I think the possibility of this phase lasting longer is very low because, from a military perspective, it cannot be sustained. Our stocks are simply not enough.”