{"id":23769,"date":"2026-03-19T06:35:57","date_gmt":"2026-03-19T06:35:57","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&p=23769"},"modified":"2026-03-19T06:44:57","modified_gmt":"2026-03-19T06:44:57","slug":"fomc-recap-march-2026","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/opening-bell\/fomc-recap-march-2026\/","title":{"rendered":"Post-FOMC Recap: Oil and Rate Uncertainties Rock the Markets"},"content":{"rendered":"\n

The March FOMC just concluded, with the Federal Reserve maintaining a cautious tone. While policy was left unchanged, the messaging did little to support expectations of near-term easing.<\/p>\n\n\n\n

Instead, the focus returned to inflation risks, particularly those linked to energy, pushing expectations for rate cuts further out.<\/p>\n\n\n\n

This reflects a shift from earlier expectations of steady disinflation<\/strong>, as renewed US\u2013Iran tensions and higher oil prices reintroduce upside risks.<\/p>\n\n\n\n

\n\n\n\n

Key Focus Points<\/strong><\/h2>\n\n\n\n
    \n
  • Fed holds rates in March, as expected<\/li>\n\n\n\n
  • Inflation risks remain to the upside<\/li>\n\n\n\n
  • Oil flagged as a key inflation uncertainty<\/li>\n\n\n\n
  • Rate cut expectations pushed further out<\/li>\n\n\n\n
  • Small probability of hikes reappears<\/li>\n\n\n\n
  • Yields rebound after initial dip<\/li>\n\n\n\n
  • Equities and gold under pressure<\/li>\n<\/ul>\n\n\n\n
    \n\n\n\n

    Rate Expectations Repriced: Post FOMC vs Pre FOMC<\/strong><\/h2>\n\n\n\n

    Expectations for rate cuts have been pushed further out following the March FOMC, marking a clear shift from earlier projections of easing as soon as June. Markets are now pricing a slower path, with cuts delayed toward September at the earliest, and increasing likelihood of just one cut, or potentially no cuts, by year-end.<\/p>\n\n\n\n

    Observe how expectations have shifted from pre-FOMC to post-FOMC pricing:<\/strong><\/p>\n\n\n\n

      \n
    • Rate cuts expected to hold for longer, and rate hikes expectations are being introduced to the mix<\/li>\n<\/ul>\n\n\n\n
      \"\"<\/figure>\n\n\n\n

      Other economic metrics also support this tonal shift on rate cuts. Officials now see total PCE inflation at 2.7% this year and 2.2% next year, while the implied policy path points to rates easing only toward 3.4% by year-end and 3.1% the following year<\/strong>.<\/p>\n\n\n\n

      This reflects a higher-for-longer stance, where policy remains restrictive unless inflation shows sustained improvement. Compared to the previous week, markets have reduced the probability of multiple cuts and are even assigning a small chance of further tightening.<\/p>\n\n\n\n

      \n\n\n\n

      Powell Confirms a Data-Dependent, Higher-for-Longer Bias<\/strong><\/h2>\n\n\n\n

      Powell\u2019s remarks during the conference help explain the shift in rate expectations, with repeated emphasis on uncertainty and upside inflation risks, particularly linked to energy markets.<\/p>\n\n\n\n

      \n

      Powell said \u2014 \u201cThe implications of developments in the Middle East for the U.S. economy are uncertain.\u201d<\/p>\n<\/blockquote>\n\n\n\n

      He also acknowledged the near-term impact of higher energy prices:<\/p>\n\n\n\n

      \n

      \u201cHigher energy prices will push overall inflation\u2026 it is too soon to know the scope and duration.\u201d<\/p>\n<\/blockquote>\n\n\n\n

      When asked about the broader economic effects, the response remained non-committal:<\/p>\n\n\n\n

      \n

      \u201cWe don\u2019t know\u2026 the effects could be smaller or much bigger.\u201d<\/p>\n<\/blockquote>\n\n\n\n

      At the same time, inflation risks were not dismissed:<\/p>\n\n\n\n

      \n

      \u201cRisks to inflation are to the upside.\u201d<\/p>\n<\/blockquote>\n\n\n\n

      And importantly, there was no signal of urgency to ease: \u201cWe will wait and see.\u201d<\/p>\n\n\n\n

      Taken together, these remarks reinforce a Fed that is no longer confident in a smooth disinflation path, but are forced to stay in \u2018Wait-and-see\u2019 mode.<\/p>\n\n\n\n

      Policy remains reactive, with any move toward easing dependent on incoming inflation data rather than a defined timeline. Bottom line, there is no near-term policy support for risk assets unless inflation shows clear and sustained improvement.<\/p>\n\n\n\n

      \n\n\n\n

      How Markets Have Reacted: Yields Rise, Equities and Gold Weaken<\/strong><\/h2>\n\n\n\n
      \"\"<\/figure>\n\n\n\n

      The immediate reaction following the FOMC has been a move higher in Treasury yields, with direct spillover effects across asset classes.<\/p>\n\n\n\n

      The US 10-year yield initially dipped before finding support and moving higher<\/strong><\/p>\n\n\n\n

      This indicates a repricing of the expected rate path rather than a one-off reaction. Markets are adjusting to the likelihood that policy remains restrictive for longer.<\/p>\n\n\n\n

      Equities have weakened as higher yields tighten financial conditions.<\/strong><\/p>\n\n\n\n

      The move lower in the US500 reflects repricing pressure rather than forced liquidation.<\/p>\n\n\n\n

      Gold has also declined, failing to benefit from uncertainty.<\/strong><\/p>\n\n\n\n

      This reflects the dominance of rising real yields over safe-haven demand in the current environment.<\/p>\n\n\n\n

      Oil remains elevated, sustaining pressure on the inflation outlook<\/strong> and reinforcing the Fed\u2019s cautious stance.<\/p>\n\n\n\n

      Taken together, this is a cross-asset adjustment to a more restrictive and uncertain policy outlook, not a broad risk-off event. At this stage, markets are adjusting to a shift in policy expectations rather than trending in a single direction.<\/p>\n\n\n\n

      \n\n\n\n

      Yields Are the Transmission Mechanism<\/strong><\/h2>\n\n\n\n
      \"\"<\/figure>\n\n\n\n

      The US 10-year yield remains the key transmission channel for policy expectations.<\/p>\n\n\n\n

      Following the FOMC, yields briefly declined before finding support along the broader trendline structure and reversing higher. This behaviour reflects a reassessment of inflation persistence.<\/p>\n\n\n\n

      Oil acts as the source of inflation pressure, while yields transmit that pressure into financial conditions. Higher yields tighten liquidity, weigh on equities, and reduce the relative appeal of non-yielding assets such as gold.<\/p>\n\n\n\n

      \n\n\n\n

      Rate Expectations: Post-FOMC vs Pre-FOMC<\/strong><\/h2>\n\n\n\n
      \"\"<\/figure>\n\n\n\n

      Changes in rate expectations are visible in current pricing.<\/p>\n\n\n\n

      For April:<\/p>\n\n\n\n

        \n
      • ~95.9% probability of no change<\/li>\n\n\n\n
      • ~4.1% probability of a hike<\/li>\n<\/ul>\n\n\n\n

        The reappearance of hike probabilities, while small, indicates reduced confidence in a smooth disinflation process.<\/p>\n\n\n\n

        The expected rate path has shifted higher and further out. Markets now anticipate a gradual easing cycle, with rates moving toward the mid-3% range into year-end, compared to earlier expectations of a faster decline.<\/p>\n\n\n\n

        This reduces the scope for policy-driven support in risk assets, as a rapid easing cycle is no longer priced.<\/p>\n\n\n\n

        \n\n\n\n

        What Matters Now<\/strong><\/h2>\n\n\n\n

        Markets are adjusting to a shift in policy expectations, not reacting to a liquidity shock. While pockets of stress are beginning to emerge in areas such as private credit, this has not yet translated into a broader liquidity event and remains a developing theme.<\/p>\n\n\n\n

        The key driver remains as the US yields.<\/p>\n\n\n\n

          \n
        • Rising yields \u2192 Continued pressure on equities and gold<\/li>\n\n\n\n
        • Stabilising yields \u2192 Potential consolidation, not immediate recovery<\/li>\n<\/ul>\n\n\n\n

          Oil remains the key catalyst.<\/p>\n\n\n\n

            \n
          • Elevated oil prices \u2192 Inflation risk persists \u2192 cuts delayed<\/li>\n\n\n\n
          • Oil pullback \u2192 Easing narrative can return<\/li>\n<\/ul>\n\n\n\n

            This keeps markets in a conditional state, where direction is determined by how inflation and yields evolve from here.<\/p>\n\n\n\n

            Bottom line:<\/strong> Until yields stabilise and inflation shows sustained improvement, risk assets are unlikely to regain durable upside.<\/p>\n\n\n\n

            <\/p>\n","protected":false},"excerpt":{"rendered":"

            Markets went into the FOMC expecting clarity on June rate cuts. Instead, the Fed pushed expectations further out, sending yields higher and pressuring risk assets.<\/p>\n","protected":false},"author":159,"featured_media":23782,"parent":0,"comment_status":"open","ping_status":"closed","template":"","market_insights_categories":[17],"class_list":["post-23769","market_insights","type-market_insights","status-publish","has-post-thumbnail","hentry","market_insights_categories-opening-bell"],"acf":[],"yoast_head":"\nPost-FOMC Recap: Oil and Rate Uncertainties Rock the Markets - Alchemy Markets<\/title>\n<meta name=\"description\" content=\"Markets went into the FOMC expecting clarity on June rate cuts. 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