Markets Await Fed and ECB Rate Decisions Amid Persistent Inflation

Key Facts

As investors await the upcoming Federal Reserve meeting, Fed reserve balances have dropped to $2.9 trillion due to a rising Treasury General Account (TGA). Markets recorded a sharp liquidity drain linked to the tax season, occurring alongside persistent U.S. core PCE inflation at 0.4%. Adding to global inflationary concerns, Canada's headline inflation rate reached 2.4% for March, while a BoC survey indicated rising input costs and a slight upward drift in inflation expectations. Meanwhile, the ECB is expected to maintain rates at 2.00% during its April 30 meeting. Collectively, these factors signal a cautious approach by major central banks regarding any early monetary easing amid ongoing geopolitical risks.

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