Federal Reserve Chair Jerome Powell stated on March 30th local time that, in the context of the energy shock triggered by the U.S.-Iran conflict, the Fed is inclined to keep interest rates unchanged and to temporarily "ignore" the impact of this shock. His remarks further boosted bond market gains.

Currently, due to ongoing tensions in the Middle East, oil supply risks have increased, and international oil prices continue to rise. Meanwhile, precious metal prices are also climbing amid Middle East conflicts and safe-haven demand. As of the close on March 30th, the NYMEX May crude oil futures rose by $3.24 to $102.88 per barrel, a 3.25% increase; the London Brent crude oil futures for May delivery increased by 21 cents to $112.78 per barrel, a 0.19% rise. On March 31st, precious metals prices surged in the early trading session, with London gold and New York gold futures both rising over 2%, with London gold reaching over $4,600 per ounce at one point.

Fed Tends to Keep Rates Steady
On March 30th, local time, Powell’s speech at an event signaled a "dovish" stance, stating that inflation prospects are manageable and that there is no need to raise interest rates at this stage, providing support to the recently pressured bond market. "We believe the current policy stance is favorable, and we can wait to see how things develop," Powell said during a Q&A session in Harvard University’s macroeconomics course. His comments seemed to reassure financial markets. Recently, expectations that the Fed might raise rates to curb inflation have been rising, but after Powell’s speech, those expectations have receded.
Many industry insiders believe that Powell’s remarks at Harvard eased concerns that the Fed would be forced to tighten monetary policy to accelerate inflation control, prompting traders to start pricing in the small possibility of rate cuts this year. Fed permanent voting member Williams also stated that, amid significant disruptions to supply chains caused by Middle East conflicts, the current interest rate level is advantageous. He noted that the conflict could cause a major supply shock with significant effects, increasing price pressures while also restraining economic activity. He added that these effects are already beginning to show, with energy and related commodity supplies disrupted. However, Williams hinted that the most appropriate response for the Fed at present is to hold steady. Goldman Sachs noted in a research report that when high prices begin to drag on consumption and output, policy focus will quickly shift from "controlling inflation" to "saving growth." Therefore, the market’s expectations for rate hikes may soon face significant revisions again.

Gold, Silver, and Oil Prices Continue to Rise
On March 30th, the three major U.S. stock indexes opened higher, but most declined as President Trump issued new threats against Iran and ongoing geopolitical tensions in the Middle East weighed on markets. By the close, the Dow rose 0.11%, the S&P 500 fell 0.39%, and the Nasdaq declined 0.73%. The S&P 500 is approaching a correction zone, with tech stocks being the biggest drag, especially in the chip sector.
In commodities, ongoing tensions in the Middle East have heightened oil supply risks, pushing international oil prices higher. By the close, NYMEX May light crude futures settled at $102.88 per barrel, up over 3%, marking the first time since July 2022 that prices closed above $100. Brent crude for May delivery closed at $112.78 per barrel, up 0.19%.
In precious metals, markets remain attentive to Middle East conflicts and rising safe-haven demand, with bargain buying supporting gold prices to rebound. On March 30th, gold prices rose for the second consecutive trading day, with NYMEX June gold futures at $4,557.50 per ounce, up 1.45%; May silver futures at $70.569 per ounce, up 1.11%.

Looking ahead, analysts believe that rate cuts are still within the path but have been pushed back to the second half of 2026. If the Middle East conflict escalates further, pushing oil prices above $120 per barrel, combined with persistent core inflation exceeding expectations, the likelihood of no rate cuts for the entire year will increase. At that point, the Fed may be forced to seek rebalancing in stagflationary conditions, significantly increasing policy framework pressures.
Relevant institutions suggest that, in the short term, gold prices will continue to be influenced by macro factors, likely remaining volatile; but in the medium to long term, factors such as fiscal deficits, geopolitical tensions, and currency concerns will continue to support gold demand.
The space for Fed tightening may be less than market expectations, with the sustainability of U.S. debt and weak endogenous economic momentum limiting rate hike capacity. Additionally, if energy prices remain high, recession fears could outweigh inflation expectations, prompting the Fed to turn dovish again and support gold prices.

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