U.S. inflation jumps
Major forecasting groups now project 2026 U.S. inflation at 4.2%, sharply above the Fed’s 2.7% outlook — the rise is blamed on persistent energy shocks tied to the Middle East conflict. Fed Governor Stephen Miran has already raised his end‑of‑year rate projection by 50 basis points and markets have repriced aggressively amid the news. (cnbc.com, bloomberg.com)
The Organisation for Economic Co‑operation and Development raised its U.S. all‑items inflation forecast for 2026 to 4.2% in its March Interim Economic Outlook, up sharply from the 2.8% it projected in December 2025. (oecd.org) The OECD identified a supply‑side energy shock tied to the Iran/Middle East conflict as the primary driver of the revision and warned that a prolonged disruption to exports would add markedly to business costs and consumer‑price inflation. (oecd.org) Federal Reserve Governor Stephen Miran said he raised his personal year‑end policy‑rate projection by 50 basis points “due to the inflation data that we received,” and described the adjustment as moving his view closer to a neutral stance at an event in New York. (bloomberg.com) Market pricing has responded: the U.S. 10‑year Treasury yield traded around 4.37–4.38% on March 26, 2026 as traders reweighed the odds of Fed easing versus a more persistent inflation path. (tradingeconomics.com) Aggregated fed‑funds‑futures dashboards and probability trackers show materially lower odds of near‑term cuts versus earlier in the year, implying roughly a 50–60 basis‑point downward shift in the market‑implied fed‑funds midpoint for late‑2026 compared with prior pricing. (rateprobability.com) The OECD urged policymakers that central banks should “remain vigilant” and that targeted fiscal measures to cushion energy cost increases should preserve incentives to lower energy use, flagging the potential need for monetary policy adjustments if price pressures broaden. (oecd.org)
