^GSPC Today, March 19: Fed Holds; SEP Lifts GDP, Core PCE to 2.7%

The FOMC rate decision today kept the funds rate at 3.5%-3.75% while the Fed raised its SEP projections. It now expects US GDP 2.4% and core PCE 2.7%, pointing to firm growth with sticky inflation. That mix keeps rate-cut timing in play and sets the tone for risk assets. We explain what this means for ^GSPC, the US dollar, and INR-sensitive Indian trades, with clear levels and portfolio ideas you can use now.

Fed holds; SEP shows firmer growth and sticky inflation

The FOMC rate decision left policy unchanged at 3.5%-3.75%. The statement and chair’s tone signalled patience, with progress on inflation but not enough to justify immediate cuts. Markets will stay focused on incoming data and how it affects the path toward price stability. For now, policy remains restrictive, keeping financial conditions relatively tight across credit and equities.

The Fed lifted its SEP projections, flagging US GDP 2.4% and core PCE 2.7%. Stronger growth with slower disinflation points to a longer glide path back to 2%. The update is consistent with today’s headlines on the projections source. For investors, this reduces confidence in an early pivot and keeps rate expectations more balanced through mid-year.

The FOMC rate decision keeps cuts on the table but not on a fixed schedule. With core PCE 2.7% in the SEP, the bar for easing is higher until inflation cools further. Coverage today highlights the Fed’s confidence in growth alongside caution on inflation risks source. That stance supports the dollar and keeps global equity valuation multiples in check.

How US stocks and the dollar reacted

The S&P 500 sits at 6624.71, down 1.36% on the day, after a 6697.16 open and 6716.09 prior close. The day range is 6621.66-6705.18. Price is near the 200-DMA at 6612.14 and below the lower Bollinger Band at 6714.51, while the 50-DMA is 6878.37. RSI is 35.22, signaling weak momentum. A close back above 6715-6740 would ease immediate downside pressure.

A firmer growth and sticky inflation mix often lifts the dollar and keeps Treasury yields supported. That weighs on global risk appetite and compresses equity multiples, especially for long-duration tech. The FOMC rate decision reinforces this dynamic until inflation cools. If yields stabilize, equities can refocus on earnings growth. Until then, rallies may be sold near moving averages and prior resistance.

For Indian markets, a firm USD can pressure INR and tighten financial conditions for imported commodities. Export-heavy IT and pharma can benefit from a softer rupee, while metals and oil users may feel cost pressure. Watch USD/INR near-term swings, FII flows, and RBI commentary. The FOMC rate decision keeps global liquidity mixed, so expect sector rotation rather than a one-way move.

Portfolio moves for Indian investors

Prefer quality IT and pharma exporters with steady US revenue and pricing power, as a stronger dollar can aid INR earnings. Accumulate on corrections rather than chase gaps. On US exposure, stagger entries into diversified S&P 500 trackers if price holds above the 200-DMA. The FOMC rate decision argues for patience and discipline on buy levels and position sizing.

If US yields stay firm, domestic yields can remain sticky. Consider short-to-mid duration funds and staggered G-sec ladders to manage reinvestment risk. Keep some dry powder for volatility around upcoming US inflation prints. The FOMC rate decision and SEP projections suggest gradual normalization, not a quick pivot, which favors carry strategies over duration bets for now.

Maintain a modest USD hedge if you have overseas goals or dollar expenses. For gold in INR, a firm USD can cap upside short term, but it still diversifies equity risk. Oil users should watch landed costs and hedge windows. The FOMC rate decision and core PCE 2.7% backdrop support a balanced mix of equity, high-quality debt, and selective hedges.

Final Thoughts

Bottom line: the FOMC rate decision kept policy at 3.5%-3.75% and raised the SEP to US GDP 2.4% with core PCE 2.7%. That points to steady growth and slower disinflation, which supports the dollar and limits near-term multiple expansion. For US equities, 6610-6620 on the S&P 500 is a key support zone, with 6715-6878 as resistance bands to monitor. Indian investors can lean into quality exporters, keep duration moderate, and hold a small USD or gold hedge. Use staggered entries, focus on cash flows, and let data, not headlines, drive allocation shifts.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.