by Louis Navellier
March 25, 2025
The big news last week was that the Federal Open Market Committee (FOMC) statement and an updated “dot plot” showed that the Fed voting members signaled two more key interest rate cuts this year, but eight FOMC members fore-casted only one rate cut. I still expect four cuts, since I expect global interest rates to plummet this year, due to the fact that economic growth in Asia is weak, while Britain, Canada, France, Germany and Mexico are all in the midst of economic contractions, requiring lower rates. As a result, I expect the Bank of England, the European Central Bank and other central banks to continue to slash rates, which, in turn, will cause Treasury yields to decline, and the Fed will not fight market rates.
Fed Chairman Powell was largely dovish during his press conference. One interesting comment came when Powell said that the University of Michigan sentiment survey, showing a rise in long-term inflation expectations, was an “outlier.” Powell also said, “I would tell people the economy seems to be healthy.”
After the FOMC meeting on Wednesday, President Trump called for the Fed to continue to cut key interest rates. Specifically, Trump said on Truth Social, “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing.”
Interestingly, Treasury yields meandered lower after the FOMC meeting, so the bond market – which controls long-term interest rates – may cause the Fed to cut key short-term rates, especially if deflationary forces persist. The Personal Consumption Expenditure (PCE) index, to be announced this coming Friday, March 28th, is expected to be very favorable, so the deflationary price impact is expected to persist.
The Economic Indicators Are Beginning to Pick Up Momentum
The Fed also reported on Tuesday that factory production surged 0.9% in February, the largest monthly increase in a year. An 8.5% increase in vehicle production was largely responsible for the surge in factory production. Excluding vehicles, factory production rose 0.3% in February for the third straight month.
In other news, the National Association of Realtors reported that February existing home sales rose 4.2% to an annual rate of 4.26 million. This was a big surprise, since economists were expecting February sales to decline 3.2%. The inventory of existing homes for sale rose 5.1% to 1.24 million. Sales were best in the West (up 13.3%) and South (up 4.4%). Although existing home sales have declined by 1.2% in the past 12 months, February’s existing home sales were 17% higher than in the same month a year ago. Overall, existing home sales are another “green shoot” reflecting improving overall economic activity.
The previous press hysteria has calmed down as the opening wave of tariff threats has turned into more subdued trade talks. The most vital contract is the United States-Mexico-Canada (USMCA) agreement, set to expire in 2026. Although Trump 1.0 approved USMCA, President Trump now wants USMCA to become the “fairest, most balanced, and beneficial trade agreement we have ever signed into law.”
President Trump has praised Mexican President Claudia Sheinbaum, which is a positive development. Another positive development is that Commerce Secretary Howard Lutnick has had some success negotiating with Ontario Premier Doug Ford, who lifted a proposed 25% tariff on hydroelectric power.
Also, Canadian Prime Minister Mark Carney said last week that Canada can only go so far in responding to new import taxes imposed by the U.S., given the mismatch in size between their respective economies. In London, Carney said, “There is a limit to matching these tariffs dollar for dollar, given the fact that our economy is a tenth the size of the United States.” This is a positive sign that the tariff debate has moved from public threats to behind closed doors for each nation’s top trade representatives to negotiate.
Ceasefire Negotiations Continue, But Wars Also Continue
Ceasefire talks between Israel and Hamas is over after multiple airstrikes in Gaza began again. The humiliating hostage releases, with Hamas militants celebrating for propaganda purposes, has just made Israel become more resolute in their desire to eliminate Hamas.
The U.S. missile strikes on the Houthi rebels in Yemen are designed to eliminate all Iranian influence there. Due to these airstrikes and missile attacks, crude oil prices are meandering higher. This is also the time of year when global crude oil demand rises, as spring weather begins in the Northern Hemisphere.
In the Ukraine conflict, President Trump had a two-hour call with Vladimir Putin last Tuesday, in which Trump urged Putin to agree to a 30-day ceasefire, during which the Ukrainian troops surrounded in Kursk would not be attacked or killed by Russian forces. In exchange, Putin likely asked for the U.S. to acknowledge more of the annexed land in Eastern Ukraine to be recognized as new Russian territory.
The good news is that Putin agreed not to strike any energy facilities or infrastructure in Ukraine, even though Ukraine recently struck similar facilities in Russia in a massive 337-drone attack before agreeing to a ceasefire. The bad news is that Putin would not agree to President Trump’s demand for a full, unconditional ceasefire. The Kremlin announced that Russia and Ukraine would release 175 of each other’s prisoners of war, with Moscow also freeing “23 seriously wounded Ukrainian servicemen” to receive medical treatment in their home country. On Truth Social, President Trump called his dialogue with Putin “very good and productive.” Obviously, both Trump and Putin have a lot to gain by continuing their talks and having a successful outcome, and I suspect an in-person meeting in Saudi Arabia is being planned.
In other global news, the fact that a fire at an electricity substation shut down London’s Heathrow airport on Friday is incredibility embarrassing for Britain, since the fourth largest airport in the world is a major global hub. The substation fire also took out the back-up generators. In Britain, at least 67,000 homes lost electricity. The fact that approximately half of British households have to be subsidized to pay for their electricity is embarrassing for Britain, since it is hard to upgrade the power grid when so many of your consumers cannot afford to pay their power bills. Frankly, blaming “terrorists” for the Heathrow fire and shutdown may be more acceptable to British citizens than inefficient infrastructure.
News from the Nvidia AI Developers Conference
Nvidia founder and CEO Jensen Huang kicked off Nvidia’s annual AI Developers Conference (officially called GTC 2025) by introducing more specialty AI chips. In a hockey arena holding 25,000 attendees, Jensen appeared with “Blue,” a small robot (shaped like Pixar’s Wall-E) to announce that Nvidia’s next generation regenerative AI chip will be called “Rubin,” and he showed off its design on a massive screen.
Jensen Huang said that in mid-2026, the AI Vera Rubin GPU platform will be released and include four times as many GPUs as the current Blackwell Ultra model. Overall, the AI Vera Rubin GPU platform will be 14 times more powerful than a current supercomputer and consume less power. In his two-hour speech, Jensen said that GTC used to be compared to Woodstock, but now it is being compared to the Super Bowl. Then, he added, “The only difference is, everybody wins at this Super Bowl.”
A big surprise was that Jensen said, “I’m super-excited to announce that GM has selected Nvidia to partner with them to build their future self-driving fleet.” Jensen added, “The time for autonomous vehicles has arrived, and we’re looking forward to building with GM AI for three areas — AI for manufacturing, AI for enterprise for how they work, and AI for in the car.” Specifically, GM will use Nvidia’s DRIVE AGX hardware system for in-vehicle hardware for future advanced driver-assistance systems (ADAS) and in-cabin enhanced safety driving experiences. Jensen said Nvidia and GM will also work together to build custom AI systems using Nvidia platforms like Nvidia Omniverse with Nvidia Cosmos to train AI manufacturing models to optimize GM’s factory planning and robotics.
I should add that Toyota also agreed to utilize Nvidia’s DRIVE AGX chip and the Nvidia DriveOS operating system to power advanced driver-assistance features in its next-generation vehicles. Nvidia chips are also used in vehicles made by BYD, Mercedes and Volvo. Nvidia’s fourth-quarter Automotive revenue was $570 million, up 103% from a year ago. The company’s full-year automotive revenue rose 55% to $1.7 billion. Nvidia CFO, Colette Kress, on the fourth-quarter conference call, said that, “Nvidia’s automotive vertical revenue is expected to grow to approximately $5 billion this fiscal year.”
Jensen also announced new personal super-computing solutions that will be sold by Dell, HP and other computer manufacturers. These new personal supercomputers will allow AI developers and scientists to work on AI modeling at their desks. Finally, Jensen also announced a wireless project involving T-Mobile and Cisco Systems, where Nvidia will help create “AI-native” wireless network hardware for new 6G networks. It is impossible to not be impressed by how Nvidia is being embraced by other Silicon Valley companies. In other words, the “frenzy” that has fueled Nvidia’s relentless growth still persists!
Navellier & Associates; own Nvidia Corp (NVDA), T-Mobile US, Inc. (TMUS), and Cisco Systems, Inc. (CSCO), in managed accounts. We do not own General Motors (GM), Volkswagen AG Unsponsored ADR (VWAGY), Dell Computer (DELL), Hewlett Packard (HP), or BYD Company ADR (BYDDY). Louis Navellier and his family own Nvidia Corp (NVDA), via a Navellier managed account, and Nvidia Corp (NVDA), in a personal account. He does not personally own T-Mobile US, Inc. (TMUS), Cisco Systems, Inc. (CSCO), General Motors (GM), Volkswagen AG Unsponsored ADR (VWAGY), Dell Computer (DELL), Hewlett Packard (HP), or BYD Company ADR (BYDDY).
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