UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Three and one from the Fed'
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Mar 18, 2026 Discussion about whether Jerome Powell might stay on as Fed chair and what that means for policy continuity. Focus on how rising oil and fuel costs could push inflation higher and spark second-round effects. Looks at US economic resilience and how that might shape central bank decisions. Also previews producer price data and the role of transport, fuel and labor in future price pressures.
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Powell Staying Extends Market Influence
- Jerome Powell's continued role matters because his comments will shape markets if he remains FOMC chair beyond May.
- Paul Donovan notes legal fights delay a successor, so Powell's statements carry extended influence on policy expectations.
Gasoline Spike Raises Fed Second Round Risk
- Rising gasoline prices are drawing Fed attention because central banks watch for second-round inflation effects, not the initial energy shock.
- Donovan highlights US retail gasoline up about $1 (35.5%) from this year's lows after four weeks of daily increases, stressing consumer visibility.
Fundamentals Will Win If Oil Stabilizes
- Underlying US economic strength will determine Fed direction if oil prices calm and geopolitical risks fade.
- Donovan says an exit from the Gulf war and six months of settled oil would leave fundamentals to drive monetary policy.