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Markets Slip as Investors Bet on Extended U.S.–Iran Ceasefire

  Stocks Edge Lower as Investors Hope U.S.–Iran Ceasefire Will Hold Stocks drifted lower today as markets balanced cautious optimism over a potential extension of the U.S.–Iran ceasefire with persistent geopolitical and inflation concerns. Recent trading sessions have shown that even modest signs of diplomatic progress can meaningfully shift investor sentiment. Asian and U.S. markets rallied earlier this week on hopes that Washington and Tehran would continue negotiations, helping unwind some of the war-driven risk premiums that had pushed oil and volatility higher. Despite the pullback, investors remain hopeful that the ceasefire—currently set to expire soon—will be extended, giving negotiators more time to work toward a longer-term agreement. Reports indicate both sides are considering adding another two weeks to the pause, a move that has already helped push Brent crude below the recent peak of nearly US$120 per barrel. Lower oil prices have eased pressure on inflation expecta...
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Fed Holds Rates Steady Amid Global Uncertainty, Signals Single 2026 Cut

 

                                            Federal Reserve Chair Jerome Powel


The Federal Reserve opted to keep its benchmark interest rate unchanged, maintaining the current range of 3.5% to 3.75%, marking its second consecutive pause of 2026. Policymakers cited elevated economic uncertainty—particularly stemming from geopolitical tensions in the Middle East—as a key factor behind the decision.

Steady Rates, Subtle Shifts

  • Fed officials reaffirmed expectations for one rate cut in 2026, consistent with projections made in December. 
  • The central bank acknowledged that the economic outlook remains clouded by global conflicts, including the Iran-related war, which continues to influence inflation and growth expectations. 
  • Updated economic projections show modest upward revisions to long-term growth and inflation forecasts, reflecting a cautiously optimistic stance despite ongoing risks. 

What This Means Going Forward

The Fed’s decision underscores a balancing act: supporting economic stability while remaining vigilant about inflationary pressures and geopolitical shocks. With only one rate cut projected for 2026, markets may continue to navigate a higher-for-longer rate environment as the central bank waits for clearer signals on inflation and global stability.

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