this week
The two focuses for the markets this week were the Iran conflict and the Federal Open Market Committee meeting.
- Iran: The continued growth has caused Brent oil prices to fall from $100/barrel to $119 to $105 to $112. They include:
- Announcements that Israel killed several Iranian leaders.
- The Persian Gulf’s energy infrastructure continues to come under attack, including some that could take five years to repair.
- Israeli Prime Minister Netanyahu said Israel and the US were working to reopen the Strait of Hormuz and that the conflict could end “much faster than people think”.
- Iran’s supreme leader Khamenei said Iran’s enemies were being “defeated”.
- The news that the Pentagon is sending three warships and more than 2000 marines to the Middle East has increased the concern of a ground invasion.
- fed: As expected, the Fed left rates unchanged at 3.50%-3.75%. And, despite revising down inflation estimates in response to higher energy prices, the Fed left the expected rate cuts from December unchanged, still seeing another cut this year and one next year. However, the market no longer sees a cut likely, with a two-thirds chance rates are unchanged this year, with a 25% chance of one or more GrowthAnd the probability of one or more cuts is less than 10%.
So, with no end in sight to the conflict, oil prices rising and rate cut prospects vanishing, 10-year Treasury yields this week have risen 10 basis points to 4.4% (the highest since July 2025), while the Nasdaq-100® is down 2%.
next week
Here are the top shows I’m watching next week:
- Tuesday: Flash PMI (March)
- Thursday: unemployment allowance
