Wednesday’s rate decision is likely to be more about a changing of the guard than a shift in current policy, as officials look set to defer to the incoming Fed chairman.

With the Federal Open Market Committee (FOMC) widely expected to leave the target range unchanged at 3.50–3.75%, developments in the Middle East and uncertainty around energy prices are set to reinforce a cautious stance among policymakers.

Barclays’ Marc Giannoni said the bank expects the statement to drop the reference to “additional” adjustments, effectively signalling that the FOMC no longer sees the next policy move as necessarily a continuation of the recent easing cycle, given firmer inflation prints and upside risks to prices. “We think most policymakers view the current policy stance as well-positioned to address risks on both sides of the Fed's dual mandate. This implies policy rates on hold for an extended period until there is more clarity about the conflict and its economic effects.” (LiveSquawk – Continue Reading)

Euro area central bankers are widely expected to leave key interest rates unchanged Thursday amid mounting evidence that the Iran war is driving consumer costs higher as it undercuts economic growth.

Traders and economists agreed that any policy action from the public lender will come at the next decision-making meeting of the European Central Bank in six weeks, with both calling for a 25 basis-point hike at that juncture.

Preliminary data for April Eurozone annual inflation and Q1 GDP are due just hours before the ECB is set to announce its decision, and neither data point is likely to garner applause at the bank’s headquarters in Frankfurt. An economists’ poll said headline annual price growth this month is expected to rise three-tenths to 2.9%, which would be the highest mark since the end of 2023 and nearly a point more than the central bank’s target of 2% over the medium term. Euro area economic growth is forecast at 0.2% q/q, with the first month of the war – March – part of the mix.

Initial inflation data due out of Spain Wednesday morning and Germany later that day could suggest a trend for the overall European number. (LiveSquawk – Continue Reading)

Japan has shaken off the weak nominal growth and deflation that defined its economy for more than two decades, says Fitch Ratings. Inflation is now entrenched and is increasingly domestically driven, supporting Fitch’s view that the Bank of Japan (BOJ) will continue to normalise monetary policy.

Headline consumer price inflation has averaged 2.9% since 2022, above the BOJ’s 2% target. Recent declines in headline inflation mainly reflect government energy measures rather than weaker underlying price pressures. Core inflation excluding fresh food and energy was 2.5% in March 2026. Inflation has broadened across the consumer basket, while pipeline pressures have increased, pointing to more persistent inflation dynamics. (Fitch – Continue Reading)

JPMorgan Chase CEO Jamie Dimon on Tuesday warned that rising government debt levels could trigger a crisis in the bond market, urging policymakers to act before markets force their hand.

Dimon’s statement was in response to a question about whether he was worried about rising levels of government debt “around the world and in your country.”

“The way it’s going now, there will be some kind of bond crisis, and then we’ll have to deal with it,” Dimon said at an investment conference held by Norway’s sovereign wealth fund, the largest in the world.

“I’m not that worried we’ll be able to deal with it,” Dimon said. “I just think maturity should say you should deal with it, as opposed to let it happen.” (CNBC – Continue Reading)