The Fed did exactly what markets started to expect. Nothing.

For the third meeting in a row, Jerome Powell and the FOMC held the federal funds rate at 4.25-4.50%. Why? "Persistent services inflation", in Powell's words, plus a labour market that just won't cool the way economists keep predicting.

Markets went in pricing about a 40% chance of a 25 bps cut. They got zero. Powell's press conference was blunt — the Fed wants to see a few more months of convincing core PCE progress before it starts easing. March came in at 2.8% year-on-year. That's well above the 2% target, and it's barely budged from December.

What's keeping it stuck? Shelter costs, sure. But increasingly, Fed officials are pointing at non-housing services — insurance, healthcare, personal care. Those categories just won't normalise. Energy prices have also edged up thanks to Red Sea disruptions and OPEC+ decisions.

The political noise? Louder than ever. Both presidential campaigns have taken swings at monetary policy in recent speeches. Powell dodged every political question with the ease of someone who's been doing this for a decade.

For investors, the takeaway is simple. Settle in. The dot plot still implies two cuts by year-end, but the bar for the first one has clearly risen. Mortgage rates, which briefly dipped under 6.8% in January, are now back above 7.1%. They're not moving meaningfully until the Fed actually pulls the trigger. Which it won't, until inflation proves it's broken. A chicken-and-egg situation, American-style.