Reuters Morning Bid The Fed's next move
Mar 18, 2026
Discussion of the Fed’s latest projections and how officials can signal caution without changing rates. Analysis of an oil shock, physical-market tightness, and the risk of structurally higher prices. Conversation about AI-driven demand lifting chip stocks and supporting equities.
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Fed Can Signal Caution Without Moving Rates
- The Fed will likely hold rates but use the dot plot to signal caution about rising oil-driven headline inflation.
- Keeping one cut in forecasts or removing it lets policymakers show caution without actually changing interest rates, says Mike Dolan.
Physical Oil Market Is Screaming Tighter Supply
- Physical oil markets show much tighter supply pain than paper markets currently price, implying risk of much higher crude.
- Strait of Hormuz disruptions, shut-in production and stressed Middle East grades drive physical strain not fully reflected in futures, says Mike Dolan.
$200 Oil Is Possible If Disruption Persists
- $200 oil is possible though uncertain; probabilities depend on conflict duration and Strait of Hormuz access.
- If the war ends and the strait reopens prices could rally down, but structurally higher oil is likely afterward, says Mike Dolan.