IRAN: Initial Headlines From Khameni Crossing

Today’s mon pol-related Fedspeak is likely to be highlighted by Kansas City Fed’s Schmid at 1310ET in his first remarks since Mar 3. One of the most hawkish members of the FOMC, he noted nearly a month ago that the Fed can’t be too complacent about too hot inflation, that data largely appears to suggest the labor market is in balance although also that he’s open to the idea that AI could support non-inflationary growth. 

• 1200ET – Goolsbee (’27 voter) opening remarks on human capital and low real rates (text only). His comments on Mar 23 sounded concerned about the inflationary impact of the Middle East conflict, saying that the energy price shock "definitely throws a wrench" into disinflationary progress.
• 1310ET – Schmid (non-voter, hawk) on mon pol and economic outlook (text + Q&A)
• 1500ET – Gov. Barr (voter) discusses stablecoin regulation (text + Q&A). He said on Mar 26 that the Fed is in a good place to hold rates whilst assessing incoming data.
• 1710ET – VC Supervision Bowman (voter, dove) on small business (text + Q&A). If she does comment on mon pol, she has already declared that she penciled in three rate cuts for 2026 in the March SEP, unchanged from her Dec entry. 

• RES 4: 112-07   High Mar 18 
• RES 3: 111-27+ 50-day EMA
• RES 2: 111-10+ 20-day EMA 
• RES 1: 111-01+ High Mar 25
• PRICE:‌‌ 110-29 @ 11:20 GMT Mar 31
• SUP 1: 109-24   Low Mar 27
• SUP 2: 109-22+ 1.764 proj of the Mar 10 - 13 - 18 price swing
• SUP 3: 109-12   2.000 proj of the Mar 10 - 13 - 18 price swing
• SUP 4: 109-01+ 2.236 proj of the Mar 10 - 13 - 18 price swing

Despite a strong bounce from last Friday's low, a bear cycle in Treasuries remains intact and gains are considered corrective. Last week’s fresh cycle low confirmed a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. This opens 109-22+ next, a Fibonacci projection. Firm resistance is seen at 111-10+, the 20-day EMA. Note that a stronger correction would allow an oversold condition to unwind.

• US rates consolidate yesterday’s sizeable rally, with a reluctance to react to WSJ reporting overnight that President Trump is willing to end operations in Iran even if the Strait of Hormuz remains closed.
• There has been very little net movement since Fed Chair Powell’s remarks yesterday implied that FOMC leadership retains a slight easing bias. It's been almost 2 weeks since the last FOMC decision/presser - thus with 2 weeks more of the Middle East war having passed, if Powell felt like there was a need to tweak communications in a more hawkish direction to help dampen/anchor inflation expectations, he would have done so.
• FF cumulative moves from 3.64% effective: +1bp Apr, -0.5bp Jun, -1bp Jul, 0bp Sep, -1bp Oct and -3bp Dec.
• SOFR futures are unchanged out to mid-2027 contracts before seeing 2.5 tick increases out in late 2028.
• The SOFR terminal implied yield of 3.415% (Z7, -1bp) compares with the March range of 3.075% (Mar 2) -3.55% (Mar 26) for closes.
• Today sees a heavier data docket with notable second tier releases starting with the MNI Chicago PMI before Conf. Board consumer confidence/labor differential and JOLTS both at 1000ET.