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Federal Reserve officials are signaling a shift in priorities, with the labor market increasingly viewed as “in balance” while inflation risks regain prominence. Comments from Philip Jefferson, Michael Barr, and Lisa Cook highlight a subtle but important pivot: employment conditions are no longer the primary concern, as attention turns back to rising price pressures driven by the Middle East energy shock.

Vice Chair Jefferson said he expects overall inflation to rise in the near term, reflecting higher energy prices stemming from the conflict. He emphasized that the duration of the shock will be critical—short-lived disruptions may only affect the economy for a quarter or two, but sustained increases in oil prices could have more material implications for both inflation and growth.

Governor Barr added that the key risk is a shift in "inflation expectations", which could lead to more entrenched price dynamics. He emphasized the importance of assessing how long energy prices remain elevated, with prolonged shocks posing a greater threat to both inflation and the broader economy.

Separately, Governor Cook further reinforced the message, stating that while overall risks are balanced, inflation risks are "greater right now:. This marks a clear change in emphasis, as policymakers prioritize containing inflation over responding to potential growth weakness.

Meanwhile, the labor market is seen as "balanced". Officials pointed to low hiring and downside risks, suggesting that while employment conditions are stable for now, they could weaken if shocks intensify.

Overall, the comments reflect a return to inflation vigilance. Rate cuts are being delayed, and while policy remains on hold for now, the balance of risks has shifted.

Oil is no longer a clean positive for Canada, as a Bank of Canada official warn that the latest energy shock also risks fueling broader inflation rather. Senior Deputy Governor Carolyn Rogers said in a speech it is "too early to assess the impacts of the war on growth", but made clear that higher oil prices will bring both benefits and costs.

While stronger energy prices could lift export income, Rogers emphasized that the same shock will squeeze consumers and businesses through higher costs, while tighter financial conditions and elevated uncertainty weigh on spending and investment. This highlights a growing dilemma for policymakers, where the traditional growth boost from oil is increasingly offset by demand destruction risks.

Rogers warned that the recent rise in energy prices will push inflation higher in the near term, with the key risk being second-round effects spreading into other goods and services. With the policy rate held at 2.25% last week, the BoC is in a wait-and-see mode but stands ready to respond.

Full speech of BoC's Rogers her.

The Middle East conflict is not Venezuela, or Russia’s invasion of Ukraine, or COVID. Policymakers should not use “the last war” as a template for the current one.

• The Middle East conflict and the resulting fuel crisis are not the same as previous crises and should not require COVID-style policy responses such as work-from-home mandates. Governments and other decision-makers need to avoid the temptation to “fight the last war”. Nor should they fall into the trap of “we must do something, and this is something”, when that something is ill-suited to the current problem.
• The focus should instead be on the key issue for the world economy: how the conflict maps into energy-supply disruption via the closure of the Strait of Hormuz and/or damage to oil and gas infrastructure in other Gulf states. Time is almost up on our initial assumption that the Strait would be closed for about a month, so we will shortly update our baseline forecast to reflect this. But the Strait is a time-limited source of leverage for Iran. At some point, third-party countries will respond to the damage being done to them; already some tankers are being allowed through.
• This is a significant shock to the economy and a challenging situation for public policy. For the next few weeks, though, the appropriate monetary policy response is “wait and see”. The current crisis is not (yet) a financial crisis or a pandemic requiring immediate, potentially out-of-cycle, action. And conditions could be quite different in a month’s time. Domestic conditions will continue to shape the RBA’s decisions at its regular meetings.

“Fighting the last war” is a common cognitive trap: trying to make a current crisis fit a past one. We saw attempts to make COVID fit the GFC template by expecting borrower distress despite massive fiscal support and, in some quarters, to make the AI boom fit the COVID template of sudden mass job losses, at least in the US.

The current conflict in the Middle East is producing plenty of examples of this behaviour, again misguided. The US/Israel attack has not gone the same way as the US intervention in Venezuela, nor are the implications like those of Russia’s invasion of Ukraine. The geographic pinch-point of the Strait of Hormuz shapes both the energy-price implications and the military ones. The context also differs significantly: the world is not emerging from a pandemic, with macroeconomic policy highly expansionary and other supply chains already disrupted.

The domestic context in Australia also differs in important ways, particularly the ceiling on east coast wholesale gas prices introduced after the 2022 episode. We are also four years further along with solar and battery installation. These changes mean that, for Australia, this is mostly an issue of fuel prices and availability, rather than electricity (as in 2022–23).

In addition, the current conflict bears little resemblance to the COVID pandemic, so policy responses should differ. We were surprised that work-from-home mandates have been seriously proposed. A fuel shortage is not a respiratory virus, and there is no reason to prevent or discourage workers from attending their workplace if they commute by foot, bicycle or public transport. Better responses would be to expand public transport coverage and frequency, encourage carpooling (including more extensive transit lanes), and cancel non-essential government travel. Only if those policies fail, or fuel shortages become so extreme that critical workers need to be prioritised, would WFH become an appropriate response.

Likewise, businesses are not facing a sudden loss of income as the community goes into lockdown. Income support measures should therefore be much more targeted, if they are needed at all.

The main similarity to the pandemic is stockpiling, as people fear downstream supply disruptions. Policy responses to address this make more sense than mandating work-from-home. Options include publicising the restocking of petrol stations that had run out of some fuels, as well as measures already taken such as temporary changes to fuel standards and the oil-for-gas supply deal with Singapore.

A kinetic war between US/Israel and Iran could drag on without necessarily having its current dramatic impact on global energy markets. For the rest of the world, the key issues are closure of the Strait of Hormuz and actual or threatened damage to gas and other civilian infrastructure in non-combatant Gulf states. But closure of the Strait is a time-limited source of leverage for Iran. At some point, third-party countries will respond to the damage being done to them; already some tankers are being allowed through.

The immediate issue for the global and Australian economies is fuel availability. Higher prices will curb demand, but periods of localised unavailability will be especially disruptive.

The implications for macroeconomic policy depend on the broader effects on inflation and growth. The RBA was already hiking rates ahead of the outbreak of the conflict. Demand growth had picked up a little more sharply than they, or we, had expected. And with the economy no longer running with significant spare capacity as in the 2010s, even small upside demand or downside supply shocks show up in prices rather than being absorbed. More frequent policy adjustments should therefore be expected.

As highlighted by the RBA’s counterparts at the RBNZ, policymakers should ordinarily try to look through the first-round, fuel-specific impacts on inflation from a shock like this. Second-round effects such as higher transport and materials costs flowing through to other prices may, however, require a response. A lift in inflation expectations is also a watch point. But if the supply-disruption element of the conflict fades over the next month or so, these effects will also be short-lived. While the forthcoming update to our baseline forecast is more severe than this, the risks around it are two-sided. It will therefore pay to wait to see which scenario plays out ahead of the May meeting. A May rate hike is still on the cards for pre-existing domestic reasons, but pre-judging the second-round effects on inflation, and the need for any hikes beyond the next one, is a much less secure strategy.

In particular, we do not expect an out-of-cycle RBA decision. These are rare: the last one was in March 2020, just ahead of lockdown, and the one before that was in 1997, both to cut rates. Even during the GFC, there were no out-of-cycle policy decisions. The decision tree facing the RBA also does not require one. May seems a long way away, but by then either things will have de-escalated, or the war will have escalated, drawn in Gulf states and worsened energy supply. De-escalation would see some of the inflationary shock soon moderate, weakening the case for further policy tightening. Escalation would be an even larger negative shock to global growth than we are already facing, but also inflationary. With the Board already split on the need to hike expeditiously, we see neither the need, nor the appetite, to bring forward that decision in either scenario. This is not COVID, and we do not expect policymakers to act like it is.

Key insights from the week that was.

In Australia, February’s CPI came in slightly below expectations, headline inflation ticking down to 3.7%yr from 3.8%yr, while trimmed mean inflation held steady at 3.3%yr. Constructive elements of the detail included: dwelling purchases posting its smallest increase in ten months; a below-expectations annual increase in education prices; and lower childcare costs, the result of increased take-up of the Childcare Subsidy following the introduction of the three-day guarantee. There were also a couple of upside surprises, however, most notable were clothing and some food-related categories. The impact from electricity rebates has also now abated, bringing reported electricity prices back into line with actual prices.

The net result is that the inflationary pulse Australia was experiencing prior to the current surge in fuel prices was marginally softer than expected. While fuel will undoubtedly boost headline inflation from March, the trimmed mean pulse is likely to hold above but near the top of the target range through 2026. For a detailed view of how each state’s economy is positioned to weather coming headwinds, see our latest Coast-to-Coast report.

The Q1 Westpac-ACCI Survey of Industrial Trends meanwhile showed that the long-awaited improvement in manufacturing conditions is finally materialising, the Actual Composite rising to 59.3 – a strong expansionary read. Underpinning the move was a surge in output growth, another solid lift in new orders and, encouragingly, a rise in employment and overtime. Note though, this survey was largely completed before the onset of the Middle East conflict. Australian manufacturing’s acute exposure to fuel and energy costs is likely to see a partial reversal in Q2 and a degree of apprehension over the outlook.

Offshore, data released was inconsequential. The preliminary March S&P Global PMIs for the major advanced economies unsurprisingly pointed to softer momentum and heightened inflationary pressures in the initial weeks of the Middle East conflict. FOMC members Bowman and Waller meanwhile were focused more on labour market weakness than inflation, though they felt it prudent to wait-a-while to assess the implications of the current conflict for price risks.

Regarding the state of the Middle East conflict, equity markets took solace in news the White House had been involved in initial intermediated discussions over the path to a ceasefire, although uncertainty over who in Iran’s leadership will take the lead in any formal negotiations has kept participants guessing on both the timing and potential success of these initiatives. The overnight extension of the 5-day reprieve for Iranian energy infrastructure by President Trump to 10 days is a positive step towards fruitful negotiations, however.

Iran’s military actions have also been relatively contained this week, and safe passage through the Strait of Hormuz has been provided to several ships, consistent with prior communications from Iranian officials that ships operated by countries not involved in the conflict are free to transit if Iran’s conditions are met. It is not clear if this includes a payment of up to US$2 million per shipment as previously telegraphed. If Iranian authorities hold to this guidance, China’s fleet and vessels from other non-aligned countries such as Malaysia (a key supplier to Australia who reportedly reached an agreement with Iran overnight) could slowly reduce the current global deficiency in crude and LNG supply, even if the US/Israel and Iran continue military actions against one another. The key risk remains the intentional, or unintentional, destruction of production and/or logistics facilities, turning a temporary loss of supply into an enduring one. The duration of this conflict and lost supply matters a great deal to both the persistence of global consumer inflation and the policy outlook.

The dollar kept firm tone and rose further against its major counterparts on Thursday, following rise in oil prices (Brent bounces back above $100) that sparked fresh wave of risk aversion and fueled demand for safe-haven greenback.

Fading ceasefire hopes after initial euphoria that pushed the dollar index down over 10% on Monday, revived bulls and kept the index within broader bull-channel after pullback from new 2026 high at $100.26 (on failure to hold gains above $100 breakpoint) was repeatedly contained by rising channel support line.

Daily studies in full bullish configuration (multiple MA bull-crosses / strengthening bullish momentum / today’s rally spiked above Fibo 61.8% retracement of $100.26/$98.63 bear-leg) contribute to positive near term outlook.

Bulls look for fresh attack at psychological $100 barrier (following failures in July / November 2025 and March 2026) with sustained break higher to confirm formation of larger base (weekly & monthly chart) as well as signal break above multi-month range ($95.30/$100.30) and expose initial targets at $100.95 (Fibo 38.2% of $110.00/$95.35) and $101.80 (May 2025 top).

Near-term bias is expected to remain with bulls while the price action holds above strong $99 support zone (bull-channel support line / weekly Ichimoku cloud base).

Res: 100.00; 100.32; 100.94; 101.49
Sup: 99.43; 99.00; 98.63; 98.42

• GBP/USD is under pressure due to cautious market sentiment, USD strength stemming from Middle East ceasefire strains, and uncertainty following President Trump's delay of Iran's energy plant destruction.
• Technical analysis reveals a bull flag pattern on the H1 chart, suggesting a potential 100-pip rally
• If the price fails to clear the 200 SMA and breaks the 1.3320 support, a move toward the YTD low of 1.3223 is possible.

GBP/USD edged its way lower on Thursday as hopes of a ceasefire in the Middle East came under strain. Mixed reports and comments from both sides saw markets adopt a cautious approach with the USD gaining a bid as a result.

Late in the day President Trump announced the delay of Iran's energy plant destruction by ten days, until April 6 at 08:00 PM Eastern Time. President Trump emphasized that talks between Washington and Tehran are going "very well" and he decided to pause at the request of the Iranian Government. Trump’s previous deadline was Friday, with the question now being whether this is genuine or another ruse ahead of the weekend?

Source: TruthSocial

Markets may remain concerned that the US could mount a ‘sneak attack’ over the weekend with defensive positioning and haven demand likely to catch a bid as a result. Such a scenario could weigh on GBP/USD.

What do the technicals say?

Looking at the technical picture and on the H1 chart below GBP/USD has edged its way lower since printing a fresh high around 1.34800 on March 23.

There is a bull flag pattern in play on the H1 chart with a breakout leading to a potential 100-pip rally to the upside.

Such a move does face challenges though, as price is currently trading near 1.3333, sitting just below the 200-period Simple Moving Average (SMA). There is also the 100 SMA (Blue), which is currently above the 200 SMA (Black) at around the 1.3372 handle.

Both of these MAs will need to be cleared first if a rally higher and breakout of the bull flag pattern is to materialize.

If the price remains below the 200 SMA (Black line) and breaks the 1.3320 support, expect a move toward the YTD low of 1.3223.

GBP/USD Daily Chart, March 26, 2026

Source: TradingView

UK retail sales to serve as a catalyst?

Early on Friday UK retail sales data is due in what is otherwise a rather quiet day on the economic calendar front. Market consensus is for a print -0.8% MoM print with the YoY print 2.1%.

A better than expected figure may provide a temporary bounce for GBP/USD but is unlikely to inspire a sustained break of the bull flag pattern. Any gains may prove temporary without a material change to overall sentiment which continues to support the greenback.

It is a year of pump-fakes for all asset classes, and Cryptocurrencies could not sustain the pressure.

Just last week, one could have imagined that Cryptos were isolated from the anxiety dampening global assets – but it was too soon to assume that things were going to be so simple.

Markets are intercorrelated, and depending on where they stand on the risk spectrum, assets can react differently to pessimistic events.

And the bearish turn that took over Markets since the rise of inflationary fears has swept virtually everything on the risk spectrum, from safe havens (as seen in Bonds and Metals) to riskier Equities and Cryptocurrency Markets.

When the common denominator, the US Dollar, shines, everything hurts – With Crude and general energy prices increasingly pressuring all sides of the global economy, it is difficult to find a sustainable hedge.

While Cryptos offer diversification from traditional asset movements, they are also highly sensitive to the gravity of risk aversion – Bitcoin attempted to push above its $75,000 major psychological level shortly after the 20 million BTC issuance, but also dragged the entire asset class down when it failed to form a breakout above.

The issue with today's session, particularly, is that selloffs are gripping higher-beta assets even harder, as seen in the Nasdaq's 2% plunge, and altcoins just can't resist.

Uncertainty should drag into at least tomorrow and, most probably, also towards the weekend.

At least, Crypto markets aren't closed over the weekend, so if the Trump Administration really attempts to end the war, they will be the first to react.

The harder part, however, is that weekend moves, if anything happens during that time, tend to see the largest corrections.

Current Session in Cryptos – March 26, 2026 (14:30). Source: FInviz

As traders brace for uncertain days ahead, let's dive right into the intraday Charts with technical levels for Bitcoin (BTC) and Ethereum (ETH) – Are there interesting spots to trade Cryptos in the event of volatility spikes over the coming days?

Let's discover this now.

Bitcoin (BTC) 4H Chart and Technical Levels

Bitcoin (BTC) 4H Chart, March 26, 2026 – Source: TradingView

After failing to hold above the quintessential $75,000 milestone, pressured by a heavier FOMC, Bitcoin is now forming a clear Head and Shoulders (H&S) pattern.

There is still a possibility that better news prevent the pattern to unfold, but the price action is not on the Bull side for now – At least, it may allow to buy-some dips.

Reactions when we get there will be necessary to estimate if this is indeed a good opportunity, but a return to $60,000 - $61,000 (H&S target), would mark a triple bottom and potentially provide another opportunity to buy a dip.

Keep in mind that a longer-term H&S pointed towards $55,000, so make sure to stagger entries in the event of wider corrections.

Levels of interest for BTC trading:

Support Levels:

• $70,000 Short-term momentum Pivot (50 and 200-4H MA)
• $60,000 to $63,000 Main 2024 support (H&S Target ~$61,500)
• $59,935 February Lows
• $52,000 to $58,000 Next support and 200-Week MA ($55,000 Mid-point)
• $40,000 Mid-2024 breakout support

Resistance Levels:

• $70,000 Short-term momentum Pivot (50 and 200-4H MA)
• March Highs $76,003 (Pre-FOMC highs)
• $75,000 Key long-term Pivot (acting as resistance)
• $80,000 to $83,000 mini-resistance (50-Day MA)
• $90,000 to $95,000 Pivotal Resistance
• Current ATH Resistance $124,000 to $126,000

Ethereum (ETH) 4H Chart and Technical Levels

Ethereum (ETH) 4H Chart, March 26, 2026– Source: TradingView

Ethereum is also forming a Head and Shoulders pattern in recent action, pointing to an almost precise test of the $1,750 Major Support (which acted as bottom last time it reached).

To confirm the fall, look for a break and 4H close below the $2,000 Mini-Support; for those only looking for entries, placing orders around the double bottom could be wise.

Keep in mind that ETH is also evolving within a bear channel which sees its bottom around $1,580 in case the selloff extends.

Levels of interest for ETH trading:

Support Levels:

• Mini-support $2,000
• $1,700 to $1,800 Pre-Bounce 2025 Key Support (testing)
• $1,744 February 6 lows (H&S target)
• $1,380 to $1,500 2025 Support
• 2025 Lows $1,384

Resistance Levels:

• March Highs $2,385 (testing)
• $2,100 to $2,300 June War support now Key Pivot
• $2,500 to $2,700 June 2025 Key Support now Resistance (Channel Highs)
• $3,000 to $3,200 Pivotal resistance (Test of the $3,000)
• $4,950 Current new All-time highs

DAX: ⬇️ Sell

• DAX reversed from resistance level 23000.00
• Likely to fall to support level 21875.00

DAX index recently reversed from the resistance zone between the resistance level 23000.00 (former support from June and November), 20-day moving average and the 38.2% Fibonacci correction of the downward impulse from January.

The downward reversal from this resistance area continues the active minor impulse wave 3 of the intermediate impulse wave (C).

DAX index can be expected to fall to the next support level 21875 (which reversed the price earlier this month).

Markets

As was the case already over the previous four weeks, trading is pushed back and forth to the tunes headlines on the latest developments in the Middle East and the many guesstimates what it might mean for the economy, for prices and for (monetary) policy. As always in markets, this has also to be put against what participants assess is already priced after four weeks op ‘position adjustment’. A murky complex. Yesterday headlines on a 15 points US proposal reportedly delivered by Pakistan to Iran, caused markets to err to the side that enough bad news was maybe discounted. 24 hours later, markets see the glass half empty again. The focus (re)turns to headlines of Iran not really considering the US proposals, the country claiming payments for war damages and de facto control over the Strait of Hormuz (including a transit fee) and the US reportedly still moving more troops to the region. Admittedly, most of this news was already available yesterday, but the perspective today is different. US President Trump stepped up pressure on Iran today as he urged the country to better get serious soon (on reaching a deal with the US), before it is too late. Otherwise there is no turning back. This doesn’t sound as parties engaging for serene negotiations. Broad-based risk-off is back. Brent oil trades at $106 p/b. The Eurostoxx 50 cedes 0.75%. The S&P 500 declined about 0.5%. Losses were bigger at the open, but in the current environment, market quotes are always conditional to the next headline on the war. Sentiment during US dealings improved slightly on a report that Iran responded to the US proposal. US yields are rising between 1.5 bps (30-y) and 5 bps (5-y). German yields add between 8.5 bps (5 & 10-y) and 5.5 bps (30 y), the belly of the curve underperforming. So, after recent sharp rise in short-term yields, 5 and 10-y tenors are at least as much affected as the (monetary-policy) related short end of the curve. Interpretation isn’t that evident, but it might suggest that markets feel that, with our without decisive central bank action, risks are growing for inflation to stay higher for longer. A similar pattern today is visible on the UK yield curve (rises between 8 bps (2-y) and 10 bps (5-10-y)). Compared to the swings on other markets, moves in the major currency cross rates remain relatively modest and orderly. DXY gains from 99.64 to 99.80, but stays away from the top since the start of the war (100.54). EUR/USD declines marginally (1.155). USD/JPY (159.55) continues challenging the 160 barrier. Sterling again is holding up fairly well with EUR/GBP even easing slightly (0.864).

News & Views

The Norges Bank left its policy rate unchanged at 4%, but made a U-turn on its forward guidance. In January, they indicated that policy rate would be reduced further this year if the economy evolved as envisaged. Now NB assesses is that the inflation outlook implies a rate hike at one of the forthcoming policy meeting. Inflation has remained above target for several years, and the outlook indicates it will be higher ahead than previously projected. Underlying inflation is projected to average 3.3%, 2.8%, 2.2% and 2.1 over the 2026-2029 policy horizon, up from 2.7%-2.4%-2.2% (2026-2028) in December. The job of tackling inflation has not been fully completed. The policy rate forecast indicates an increase to between 4.25% and 4.50% by eoy 2026 with first rate cuts only seen towards end 2027, depending on uncertain economic developments. Norwegian money market currently attach a 61% probability to a 25 bps hike at the next, May, meeting. The Norwegian swap curve extends its inversion with yields rising by up to 9 bps for the 2-yr tenor. The NOK trades stronger at EUR/NOK 11.13 with higher oil prices helping offset the impact from weaker risk sentiment.

OECD published its interim economic outlook. Global GDP growth is projected broadly stable at 2.9% in 2026 before edging up to 3% in 2027, sustained by robust technology-related investment and gradually lower effective tariff rates. That’s broadly unchanged from the previous projection (2.9%-3%). Projections assume that the current energy market disruption is temporary, with prices easing from mid 2026 onward. Inflation pressures will persist for longer with G20 inflation now expected at 4% this year (from 2.6%) before easing to 2.7% in 2027. Simulations in the report explore a scenario where oil and gas prices rise well above baseline projections - by around a quarter in the first year and remaining elevated thereafter - combined with tighter global financial conditions. In this case, global GDP could be around 0.5% lower by the second year, while inflation would be higher by about 0.7 percentage points in the first year and 0.9 percentage points in the second. Central banks will need to remain vigilant and attentive to shifts in the balance of risks to ensure that underlying inflation pressures remain durably contained.