What a difference a week (and a banking crisis) makes: Just a week after fretting about the potential for a larger-than-expected interest rate hike, investors are now expecting the Federal Reserve to begin to cut interest rates as soon as June as the threat of a major banking crisis forces policymakers to prioritize financial stability over fighting inflation, according to the Financial Times. The collapse of two large regional banks last week and the potential knock-on effects in Europe mean that many bond traders now expect the Fed to leave rates unchanged when it meets next week, despite data on Tuesday showing that core inflation accelerated in February.

But analysts are torn: Trying to predict whether the central bank will hold rates steady or follow through with a smaller 25-bps increase is a fool’s game, with analysts split on how it will react to the crisis, Reuters says.

Whichever way the Fed swings could have major implications: Yet another rate hike risks further destabilizing the US banking sector, but a pause could end up undermining all the Fed has done over the past year to fight inflation. “I think they do indeed hike 25 bps next week,” one analyst said. “They need to keep up the fight on inflation to maintain credibility, and a pause here at these levels isn’t going to stop the bleeding in the markets.”

	EGX30	14,724	-4.2% (YTD: +0.9%)
	USD (CBE)	Buy 30.84	Sell 30.94
	USD at CIB	Buy 30.85	Sell 30.95
	Interest rates CBE	16.25% deposit	17.25% lending
	Tadawul	10,049	-1.6% (YTD: -4.1%)
	ADX	9,525	-0.7% (YTD: -6.7%)
	DFM	3,310	+0.2% (YTD: -0.8%)
	S&P 500	3,892	-0.7% (YTD: +1.4%)
	FTSE 100	7,344	-3.8% (YTD: -1.4%)
	Euro Stoxx 50	4,035	-3.5% (YTD: +6.4%)
	Brent crude	USD 74.33	-4.0%
	Natural gas (Nymex)	USD 2.44	-5.2%
	Gold	USD 1,931.30	+1.1%
	BTC	USD 24,548	0.0% (YTD: +48.1%)

THE CLOSING BELL-

The EGX30 fell 4.2% at yesterday’s close on turnover of EGP 1.91 bn (7.6% below the 90-day average). Local investors were net sellers. The index is up 0.9% YTD.

In the green: CIRA Education (+10.3%), Eastern Company (+2.4%).

In the red: Qalaa Holding (-14.9%), Sidi Kerir Petrochemicals (-13.2%) and Heliopolis Housing and Development (-13.1%).