Yields mixed ahead of March FOMC meeting. Treasury yields declined slightly at the long-end of the curve today as markets looked ahead to tomorrow’s FOMC decision and updated Dot Plot. The front-end of the curve closed ~2 bps above intraday lows alongside a rebound in oil prices, stemming from uncertainty over the Strait of Hormuz reopening. The 2-year yield closed nearly flat at 3.67%, while the 30-year yield closed 3 bps lower at 4.84%. Meanwhile, WTI crude settled at $96.21 per barrel, up from $93.50 at yesterday’s close. Equities rose, with airlines leading the way as executives cited elevated bookings to lock in prices ahead of potential fuel cost increases from the Iran War. The S&P 500 and NASDAQ closed 0.25% and 0.47% higher, respectively.
Fed expected to hold rates steady at tomorrow’s FOMC meeting. The Federal Reserve is widely expected to hold interest rates steady as the March committee meeting concludes tomorrow. In the wake of the ongoing conflict in Iran, markets are now pricing in a rate cut in October or December, pushed back from expectations of June or July before the war began. Alongside the policy decision, the Fed will also release their first Summary of Economic Projections for 2026, which will provide updated forecasts for economic growth, inflation and the path of interest rates. As Chair Powell’s penultimate FOMC meeting, markets will watch his post-meeting remarks closely, though Powell is expected to emphasize that the Fed will stay on hold as it monitors ongoing oil shocks.
EU to restart US trade deal ratification after delays last month. The European Union will resume ratification of its US trade agreement after pausing in late February amid uncertainty following the Supreme Court’s IEEPA tariff ruling. The EU’s trade committee will vote on Thursday, with a full plenary vote to follow in the coming weeks. European lawmakers added an amendment that says the deal will only go into effect if the US honors the original terms. The European Commission has said it will respond “firmly and proportionately” if the US does not honor the original trade deal.The decision comes as the US opened an investigation into EU trade practices last week, which may result in more tariffs.
