Fed Rate Path — Where Are We?
The Federal Reserve held rates at 4.25–4.50% at its March meeting. Fed funds futures currently price:
- May meeting: 8% probability of cut — essentially no chance
- June meeting: 31% probability of cut
- July meeting: 52% cumulative probability of at least one cut
- Year-end: 1.8 cuts priced in (down from 3.2 at start of 2026)
Key shift: The market has substantially re-priced fewer cuts after persistent inflation in January and February. The upcoming March CPI (releasing April 10) will be pivotal for this pricing.
March CPI Preview (April 10)
Consensus estimates:
- Headline CPI: +0.3% MoM, +3.2% YoY
- Core CPI (ex-food & energy): +0.3% MoM, +3.5% YoY
- Super Core (services ex-shelter): Key Fed focus metric — expected +0.35%
Why it matters: A print above 3.5% YoY for core would likely push June cut probabilities below 20%, strengthening the Dollar and pressuring equities. A surprise below 3.3% would accelerate cut pricing and support risk assets.
Historical reaction: CPI beats vs. miss have produced ±0.8% SPX moves on average in 2025.
Oil Markets — Geopolitical Premium Fading
WTI crude (CL) has settled into a $68–$74 range after the geopolitical risk premium from early 2026 faded.
Supply picture:
- OPEC+ maintained current production cuts at March meeting; next review June
- US shale production: 13.1 million b/d — near record highs, limiting upside
- Iraq and Kazakhstan compliance improving — adding marginal supply
Demand picture:
- China: Oil demand growth slowing vs. 2024 pace (EV adoption accelerating)
- India: Offsetting some China slowdown — demand growing 4.2% YoY
- Global demand: IEA projects +1.1 mb/d growth in 2026 (vs. +2.3 mb/d in 2023)
Net assessment: Supply/demand balance is relatively tight but not extremely so. $65–$78 range likely to persist absent a major shock. Downside risk: demand data disappoint. Upside risk: Middle East escalation.
Gold — New All-Time Highs Above $3,100
Gold (XAU/USD) touched $3,145 this week — a new all-time high. The rally has been driven by multiple concurrent tailwinds:
Why gold is at all-time highs:
- Central bank buying: EM central banks (China, India, Turkey) continue accumulating gold as USD reserve alternative
- Geopolitical hedging: Multiple conflict zones driving safe-haven demand
- Real rate dynamics: Despite the Fed holding, real rates (nominal minus inflation expectations) have declined slightly
- ETF inflows: Gold ETF holdings increased by 42 tonnes in Q1 — first quarter of net inflows since 2022
- Retail FOMO: Retail investor interest in gold has surged (Google Trends data)
Technical levels:
- Support: $3,040 (former ATH, now support)
- Support 2: $2,980 (weekly pivot)
- Resistance: $3,200 psychological level
- Extension target: $3,400 (measured move from base)
Risk to gold bull thesis: A significant US inflation surprise that forces the Fed to hike again would pressure gold via stronger Dollar and higher real rates.
US Treasury Market — Yield Curve Dynamics
The yield curve (2Y vs 10Y) is now marginally positive (+15 bps) after being inverted for nearly 2 years. This "normalization" has significant implications:
| Duration | Current Yield | 3-Month Change |
|---|---|---|
| 2-Year | 4.62% | -12 bps |
| 5-Year | 4.38% | -8 bps |
| 10-Year | 4.77% | +3 bps |
| 30-Year | 5.02% | +8 bps |
The curve is steepening primarily from the long end rising (more fiscal borrowing concern) rather than the short end falling — a "bear steepener" pattern. This is historically associated with periods of higher inflation expectations.
Macro Playbook for Traders
For traders journaling in Tradapt, consider tagging your trades with the macro regime:
- Risk-on / weak USD environment (current) → tends to favor: long equities, long EUR/GBP, long gold, long Bitcoin
- Risk-off / strong USD → tends to favor: short equities, long USD, long bonds, short commodities
- Stagflationary (high inflation + weak growth) → tends to favor: long gold, long commodities, short bonds
Tracking your performance across different macro regimes in Tradapt's analytics helps you understand which environments suit your strategy best.
Disclaimer: This analysis is for educational purposes only. Commodities and macro trading carry significant risks. This is not financial advice.