Weekly Macroeconomic Analysis: Key Market Trends and Economic Insights

 Explore the impact of major macroeconomic developments, including interest rate decisions, inflation trends, trade policies, and market movements, on global economic growth and investor sentiment.

During the week of 17 March 2025, there were many important events in the global and Indian markets. India’s stock market had a strong rise and globally, the major central banks made their decisions on interest rates. Trade uncertainties, inflation trends, and government policies played a big role in shaping the economy. Let us do a thorough weekly macroeconomic analysis of each of them in detail.

Indian Economy

In the Indian economy, a strong revival has been seen where the markets saw a strong recovery, which was caused by increased investor confidence, more foreign investments, and positive global trends. Benchmark indices were up for five days, with Nifty 50 reporting its best weekly performance in over four years due to foreign capital inflows. 

During the week, Foreign Financial Institutions (FII) made a net buying of Rs.9,818 crore. The index gained around 4.2% and the investor’s wealth increased by Rs.22.12 lakh crore in this week.

Uptrend in the Indian markets

Also during the week, the Union Cabinet has approved Rs.16,000 crore for major investments in key sectors to make the rural economy well, increase agricultural output, and promote digital transactions. This has been divided into the following:

• Dairy Development: Rs.3,400 crore has been allocated under the Rashtriya Gokul Mission to boost milk production and improve cattle breeds, while Rs.2,790 crore has been designated for a nationwide dairy development program to enhance infrastructure.
• Fertilizer Sector: The Cabinet has approved a Rs.10,601 crore brownfield ammonia-urea complex in Namrup, Assam. The aim of this project is to produce 12.7 lakh metric tons of urea every year.
• Infrastructure Development: The Cabinet has allocated Rs.4,500 crore for a six-lane, access-controlled Greenfield High-Speed National Highway that connects JNPA Port to Chowk in Maharashtra.

Further, India’s wholesale price index (WPI) inflation data was released, which shows that the WPI inflation increased from 2.31% in January 2025 to 2.38% in February 2025. This was majorly caused by an increase in the fuel, power, and manufacturing costs.

U.S. Economy Update

During the week, the U.S. Federal Reserve kept its benchmark policy rate unchanged at the 4.50% range because of a cautious approach amid shifting economic conditions. Fed Chair Jerome Powell highlighted the policy uncertainties and possible trade tariffs on U.S. imports, which are coming under Trump’s plans, are increasing inflation and causing prices to rise faster than expected. Further projections for the U.S. economy were given:

• A projection of two rate cuts ahead in 2025
• The economic growth is expected at 1.7% 
• Inflation is projected to rise to 2.7%. 

Further, the U.S. industrial production data was published where industrial production exceeded the expectations last month. The industrial output was up by 0.7% in February, following a revised 0.3% increase in the previous month, as per the Federal Reserve’s statement majorly driven by the 8.5% jump in vehicle and parts output due to rising trade uncertainty. 

Uptrend in the Indian markets

Japan Economy Update

The Bank of Japan (BOJ) decided to keep its key interest rate unchanged because of economic uncertainties linked to Trump’s trade policies. Since Trump’s administration imposed tariffs on various imports, global central banks have been forced to reconsider their monetary strategies.

After a two-day meeting, the BoJ held rates at 0.5%, a 17-year high, following its decision to eventually tighten policy last year after decades of ultra-loose monetary conditions. Governor Kazuo Ueda has warned that the tariffs may impact Japan’s economy by affecting trade, production, inflation, and consumer confidence.

U.K. Economy Update

The Bank of England (BOE) also kept its benchmark interest rate unchanged at 4.5% during the week. There was voting, and the outcome was an 8 – 1 majority. Only one MPC member voted in rate-cute favour by 25 basis points.

The meeting raised concerns over global trade tensions and signs of economic stagnation in the UK. The decision comes amid ongoing volatility in trade due to shifting U.S. policies. Trade tariff measures have added to market uncertainty, potentially affecting UK inflation and economic growth.

On-going tariff issue

Commodity Market Update

Looking at the financial market insights, in comparison to the domestic and global equities, the commodity market was quite stable. Let us look at the details: 

• Bullions: During the week, MCX Gold hit an all-time high of Rs.89,797 on Thursday, while MCX Silver peaked at Rs.1,01,996 on Tuesday. The key drivers were the U.S. Fed’s unchanged rates, tariff uncertainties, and renewed Middle East tensions. Investors favoured gold as a safe asset amid market volatility.
• Crude Oil: The crude inventories increased, and overall petroleum product demand showed steady growth. The U.S. crude oil refinery inputs averaged 15.7 million barrels per day (bpd), a slight decrease of 45,000 bpd from the previous week. Refineries operated at 86.9% capacity. Crude oil inventories increased by 1.7 million barrels to 437 million barrels, about 5% below the five-year average.

Major Events for the Coming Week

Country	Event
U.S.	Flash Manufacturing PMI
U.S.	Unemployment Claims

Bottomline

The past week’s events show the challenge of balancing economic growth, inflation, and policy decisions. Compared to the negative global economic trends, India’s strong market performance shows optimism. Global uncertainties, particularly around trade policies and interest rates, continue to create caution. Central banks are keeping a stable stance, showing a wait-and-watch kind of strategy, with future monetary changes depending on economic trends. Looking at the macroeconomic indicators and economic policy analysis, investor sentiment may be influenced by policy decisions, tariff issues, and geopolitical uncertainty.