Market Highlight 19.03.2026

The U.S Federal Reserve early this morning kept its benchmark interest rate unchanged and, for now, maintained its projected rate-cut path for this year, as surging energy prices threaten to prolong the FED’s fight against inflation. Speaking after the meeting, FED Chair Jerome Powell offered little guidance on the timing of the next rate cut, instead stressing that policymakers have very limited room to ease. This implies that near-term rate reductions - after the incoming FED Chair takes office in May 2026 - are unlikely unless the economy weakens. FED officials voted 11 - 1 to hold the policy rate in a 3,5% - 3,75% range, marking the second consecutive meeting with rates left unchanged. The latest data show U.S inflation had already been picking up even before the Middle East war - now disrupting the Strait of Hormuz, one of the world’s most critical shipping lanes - erupted. The FED’s preferred measure of underlying inflation, core PCE, accelerated to 3,1% in January 2026 from a low of 2,6% last April.

The USD Index rebounded by nearly 0,7% last night after two straight daily declines, as the FED Chair warned that U.S inflation could climb further later this year amid the war in Iran. While FED officials still endorse a baseline scenario of one additional rate cut by year-end, that outcome becomes increasingly unlikely if tensions in the Middle East persist.

The USD/VND interbank exchange rate ticked higher and held around 26.300 for most of yesterday’s session. Markets will continue to monitor this week’s policy decisions from major Central Banks.

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