Context:

The Fed held the federal funds rate steady at 3.50%–3.75% as markets priced in limited near-term policy shifts, while Treasury yields largely stayed flat and oil surged to a four-year high on geopolitical concern. The benchmark 10-year yield sat around 4.41%, with the two-year yield just under 3.92%, as investors awaited key data on GDP and inflation gauges. Dissent at the meeting reached its highest since 1992, signaling some officials worry about inflation risks and the potential for later rate cuts. Brent crude spiked on reports of possible U.S. military briefings on Iran, adding to uncertainty about energy supplies and global risk. The coming sessions will focus on forthcoming GDP, PCE inflation, and jobless claims, alongside policy signals from Europe.

Dive Deeper:

• The Federal Reserve kept the target range for the federal funds rate at 3.50%–3.75% after the latest policy decision, a move investors broadly expected.

• There was notable dissent within the FOMC, with three officials voting against including an easing bias in the statement, the highest level of dissent since 1992, signaling concern about inflation pressures despite bets on eventual rate cuts.

• Oil prices jumped to four-year highs as Brent crude briefly crossed $126 a barrel on reports that the U.S. might brief President Trump on potential action against Iran, with WTI also trading higher around the same period.

• Financial markets shifted focus to upcoming data, including the preliminary Q1 GDP release and the Fed’s preferred inflation gauge, the PCE, with core PCE expected to run around 3.2% for March.

• Investors also anticipated weekly jobless claims as part of the data slate, weighing into expectations for economic momentum and potential policy adjustments.

• In Europe, the ECB and Bank of England were anticipated to deliver policy decisions, with regional inflation rising and growth slowing, prompting keen scrutiny of forward guidance amid broader geopolitical tensions.

• Geopolitical dynamics surrounding Iran and the Strait of Hormuz contributed to market volatility, intertwining energy, inflation, and growth concerns as the world eyes near-term policy and economic indicators.