This Week
The two focuses for markets this week were the Iran conflict and the Federal Open Market Committee meeting.
- Iran: Continued developments saw Brent oil prices swing from under $100/barrel to $119 to $105 to $112 now. Those included:
- Announcements that Israel killed multiple Iranian leaders.
- Continued attacks on Persian Gulf energy infrastructure, including some that could take five years to repair.
- Israeli Prime Minister Netanyahu saying Israel and the U.S. are working to reopen the Strait of Hormuz and the conflict could end “faster than people think.”
- Iran’s Supreme Leader Khamenei saying Iran’s enemies were being “defeated.”
- News the Pentagon is sending three warships and over 2000 more Marines to the Middle East, raising concerns of a ground invasion.
- Fed: As expected, the Fed left rates unchanged at 3.50%-3.75%. And, despite revising up inflation estimates in response to higher energy prices, the Fed left projected rate cuts unchanged from December, still seeing one this year and one next year. Markets, however, no longer see cuts as likely, with a two-thirds chance rates are unchanged this year, a 25% chance of one or more hikes, and less than a 10% chance for one or more cuts.
So, with no end in sight to the conflict, oil prices rising and rate cut odds disappearing, 10-year Treasury yields are up 10 basis points to 4.4% (highest since July 2025) this week, while the Nasdaq-100® is down 2%.
Next Week
Here are the top events I’m watching next week:
- Tuesday: Flash PMIs (March)
- Thursday: Jobless Claims
