Over the last week, the market has stopped treating the shock around Iran and Hormuz as a clean headline event and started treating it as a regime problem. You can see that first and clearest in the policy strips. Across the US, eurozone, UK, Australia, Canada and Japan, curves have shifted higher and steeper. In the US, that has meant a much shallower easing cycle. Everywhere else, it has meant the market has been forced to price a firmer inflation response into the back half of the year.
That is the lens I think matters this week. The calendar is crowded, with the RBA meeting March 16–17, the Fed March 17–18, the ECB and BoJ March 18–19, and the SNB and BoE on March 19, while the conflict around Hormuz remains severe enough that the IEA has announced its largest-ever coordinated emergency oil reserve release. The real question, though, is not simply who moves on rate day. It is whether policymakers validate what markets have already started to price: an energy-led inflation impulse now, and a growth problem later.
