Financial Markets Daily Report
19 March 2026
The Federal Reserve left the fed funds rate unchanged at 3.50–3.75%, while striking a hawkish tone and projecting higher inflation. Chair Powell noted that the economic impact of the Middle East conflict remains uncertain but could add to inflationary pressures and weigh on activity. US Treasury yields rose across the curve, as expectations for a rate cut in 2026 declined toward 50%, while equities ended lower and the dollar strenthened.
Risk sentiment deteriorated further amid escalating tensions in the Middle East, with Iran and Israel targeting major energy infrastructure. Brent crude surged above $110/barrel, weighing on global markets. European equities declined, while sovereign yields rose across the region, and the euro weakened below 1.15 against the dollar.
European natural gas (TTF) rose +6% to near €54/MWh, with futures shifting higher toward €52/MWh by year-end (from €49 previously). Gold eased below $5,000/ounce, pressured by the stronger dollar following the Fed meeting.