Global markets, including Bitcoin, may face a critical test next week as seven major central banks prepare to announce interest-rate decisions while rising oil prices rekindle fears of persistent inflation.
The policy-heavy week begins with the rate decision from the Reserve Bank of Australia on March 17. On March 18, both the Bank of Canada and the Federal Reserve will reveal their policy decisions. The sequence concludes on March 19 with announcements from the Bank of Japan, Swiss National Bank, Bank of England and the European Central Bank.
Until recently, investors largely expected central banks — especially the Fed — to begin lowering borrowing costs or at least avoid tightening policy further this year. The rapid expansion of artificial intelligence, widely viewed as a potential disinflationary force due to its impact on productivity and labor markets, had reinforced expectations for easier monetary policy. That outlook helped support risk assets, including bitcoin.
However, geopolitical developments have complicated that narrative.
A conflict that began on Feb. 28 with coordinated U.S. and Israeli strikes on Iran has escalated through retaliatory attacks and disruptions to energy shipments across the Middle East. The resulting supply concerns have pushed oil prices higher and revived fears that global inflation could intensify again.
Higher energy costs often translate into broader inflation pressures, forcing investors to reassess expectations for central bank policy. Some traders now worry policymakers may need to keep interest rates elevated for longer — or even consider tightening further — to contain rising prices.
If central banks signal a more hawkish stance next week, risk assets such as bitcoin could face renewed volatility. Policymakers may also be determined to avoid repeating the policy mistake of 2021–22, when inflation was initially described as temporary before surging across major economies.
At the same time, a cautious or data-driven approach from central banks could provide relief for markets. If policymakers emphasize patience or suggest that inflation pressures may prove temporary, risk assets could benefit.
Ethan Harris, an economist and long-time observer of the Fed, said policymakers often respond carefully to oil-driven inflation shocks.
“Like all supply shocks, the first Fed response to an oil price spike is to watch and assess the damage,” Harris wrote in a LinkedIn post.
He noted that oil shocks typically present a policy dilemma because they tend to slow economic growth while simultaneously pushing inflation higher.
“Before moving, the Fed wants to determine which problem is more severe,” he explained, adding that many energy price spikes prove temporary. “The Fed does not want to adjust rates only to reverse the decision weeks later.”
Historically, monetary policy decisions from the Federal Reserve — and at times the Bank of Japan — have had the most significant influence on bitcoin’s price movements.
With rising energy costs already affecting households and businesses across Japan, the Bank of Japan’s decision next Friday could prove especially important for both domestic markets and bitcoin.
