MARKET UPDATE

This morning equity markets jumped higher and Treasury yields are down with the 10-year yield trading near 4.30%.  The latest CPI data continues to remain stubbornly above the Fed's 2% target.  On the other hand, recent jobs and unemployment data has started to weaken in recent months.  All three of the fall FOMC meetings resulted in 25bps cuts, and the Fed has held rates steady again in both January and March so far in 2026.  The new March forecast materials suggest that the target rate will likely continue to move modestly lower over the year year.  The Fed continues to observe the economic data and emphasize that their focus is on maintaining the dual mandate of 2% inflation and full employment.  Prior to last September's meeting, the FOMC preferred to be patient before lowering rates, as they observed the available data on these two key metrics in today's dynamic economic environment.  Notable topics at this point in the current economic cycle are economic impacts from the conflict with Iran, as well as recent global trade policy changes.  The FOMC will continue to observe and discuss how these events and the current rate level impact inflation and employment in the US.  

- CMS Staff