#federal-reserve-monetary-policy

#federal-reserve-monetary-policy

Changing expectations about the Fed's stance, a tense geopolitical backdrop, and the impact on inflationary risks have fuelled caution ahead of Chair Powell's comments. Yields and the dollar remain exposed to escalating tensions in the Middle East, as disruptions to energy infrastructure and key supply routes pushed oil prices higher, stoking inflation concerns.

EUR/USD has continued its downward trend since peaking around 1.2080 at the end of January, as the divergence in economic prospects between the United States and the Eurozone has become increasingly evident. This movement reflects the current macroeconomic landscape, where the US dollar remains supported by relatively stable growth and inflation that is still above target, while the Eurozone faces slower expansion and lacks sufficient policy momentum to trigger a meaningful shift in expectations.