Fed will 'wait and see'
Federal Reserve Chair Jerome Powell said the Fed will 'wait and see' how war‑driven energy price spikes affect inflation and indicated no immediate plans to hike rates — a dovish stance that gives markets time to digest the shock. The comment underscores policymakers’ concern about war‑related supply shocks rather than domestic overheating. (cnn.com) (cnbc.com)
The Federal Open Market Committee left the target range for the federal funds rate at 3.50%–3.75% at its March 18 meeting. (federalreserve.gov) In a March 30 appearance at Harvard, Powell said inflation expectations “do appear to be well anchored” and described the current policy stance as “a good place” amid uncertainty from the Iran war and tariff developments. (cnbc.com) Powell argued that monetary policy works with long, variable lags and said a tightening now would likely bite after an oil‑price shock has faded, reducing the effectiveness of an immediate rate hike. (cnbc.com) Traders re-priced the outlook sharply after his remarks: implied odds of a Fed rate increase by December slid from better‑than‑50% earlier in the week to roughly 2.2% following the Harvard appearance. (cnbc.com) U.S. Treasury yields fell across the curve, with the two‑ and 10‑year notes dropping about 9–10 basis points as markets shifted away from near‑term hike expectations. (bloomberg.com) Oil surged in parallel: West Texas Intermediate settled above $100 a barrel on March 30, trading around $102–103 per barrel — its highest close since July 2022 — driven by widening conflict risks. (bloomberg.com) Powell also flagged the roughly $3 trillion private‑credit sector, saying the Fed is watching it “super carefully” while noting current strains do not yet look like a systemic threat. (techi.com)
