NAB Morning Call
Divided He Falls. But Stays.
Why It Matters
Understanding the interplay between rising oil prices, central‑bank policy shifts, and geopolitical risks is crucial for investors and policymakers as it directly influences inflation trajectories and financial market stability. This episode provides timely insight into the Fed’s evolving stance and upcoming central‑bank decisions that will shape monetary conditions through the rest of 2026.
Key Takeaways
- •Oil spikes to $118/barrel, highest since crisis.
- •Fed holds rates; dissent hints shift toward neutral guidance.
- •Powell stays governor; Walsh nomination awaits Senate confirmation.
- •Central banks pause policy as oil, inflation, geopolitics pressure markets.
- •US durable goods up, trade deficit widens, dampening growth expectations.
Pulse Analysis
The morning call notes that Brent crude jumped to $118 a barrel and WTI to $107, the highest levels since the current crisis began. The rally follows stagnant Gulf negotiations and a provocative post from former President Donald Trump, warning that the “no‑more Mr. Nice Guy” stance will keep the blockade in place. Higher oil prices are already squeezing household budgets worldwide, while oil‑exporting nations such as Canada see a boost to their trade balances. The surge also lifted U.S. Treasury yields, with the two‑year rate edging above the Fed funds target.
At the Federal Reserve’s final meeting under Jerome Powell, policymakers left rates unchanged but recorded an unprecedented four dissenting votes, the most since the 1990s. Dissenters called for a more symmetric policy language, suggesting the neutral rate is near current levels and that future guidance could swing either way. Powell reiterated that the Fed is close to neutrality and sees no immediate need for action. Meanwhile, Powell will remain on the Board as a governor while Kevin Walsh’s nomination proceeds through the Senate, a transition that could reshape communication practices, especially given Walsh’s aversion to dot‑plots.
Elsewhere, the Bank of Canada, Bank of England and ECB all opted to hold rates, citing uncertainty from the Gulf conflict and lingering inflation pressures. U.S. durable‑goods orders rose 0.8 % in March, driven by non‑defense AI and data‑center equipment, yet the trade balance widened as imports outpaced exports, tempering the Q1 GDP forecast of roughly 2.2 % annualized. European CPI data show modest easing, but inflation remains above target, keeping the ECB on the sidelines for now. With major tech earnings from Meta, Microsoft, Alphabet and Apple slated for later today, market participants will watch for further clues on growth and monetary policy.
Episode Description
Thursday 30th April 2026
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Oil continues to lurch higher, getting close to $120 this session, the highest since the closure of the Hormuz Strait. There’re no signs of progress, infact President Trump is indicating he’d prefer to wait until his blockade has an impact on Iran. That could take some time. Meanwhile, the Fed kept rates on hold in Jerome Powell’s last meeting as chair, with a divided board. Several objected to the neutral tone of the guidance, which suggested the next move is more likely to be down that up. Meanwhile Powell announced he will stay as a Governor for now. NAB’s Gavin Friend joins Phil to discuss this, also a dovish hold from the bank of Canada, and a look ahead to the ECB and Bank of Enfgland. Sand don’t forget the mega-cap earnings coming up.
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