Fed Holds as Inflation Progress Remains Key

• The Fed held rates at 3.50%–3.75% (11–1 vote), maintaining a cautious stance as inflation remains elevated, with policymakers still expecting one cut this year, though timing remains uncertain.
• Markets have pushed back easing expectations, now pricing a 0% chance of a cut in April and only ~60% by December, reflecting ongoing inflation concerns.
• Rising geopolitical tensions lifted oil prices to ~$108–109/bbl, adding upside risk to inflation and reinforcing the Fed’s cautious approach.
• In Australia, focus turns to February labour data, with employment expected to rise ~20k and unemployment to hold at 4.1%, alongside the RBA Financial Stability Review.
• Globally, central banks including the ECB, BoJ and BoE are expected to hold rates, as stable inflation expectations allow time to assess the impact of higher energy prices.