“If one does not know to which port one is sailing, no wind is favorable.”
-Lucius Annaeus Seneca
Here’s what you need to know this week:
- Stocks drop due to Iran conflict and disappointing economic reports
- The Federal Reserve meets as the Iran war complicates the interest rate debate
Bruised
Stocks continued their slide last week on lackluster economic reports amid the backdrop of the Iran war. The first report was the Consumer Price Index (CPI) report for the month of February, which showed monthly inflation at 0.3%and annualized inflation at 2.4%:
This CPI report was actually in-line with analysts’ expectations and was not considered a disappointment[1]. However, the Federal Reserve prefers the Personal Consumption Expenditures (PCE) report as a measure of inflation; on Friday we received the PCE report for the month of January (delayed due to the government shutdown) and the report showed monthly inflation at 0.3% and annualized inflation at 2.8%:
Additionally, “core PCE” (which strips out food and energy costs) showed an annualized rise of 3.1%[2]. While these are relatively tame numbers, we are still moving further away from the Federal Reserve’s long-term goal of 2% inflation and the likelihood of interest rate cuts (more on this in a moment). The last report was the revision to the Gross Domestic Product (GDP) report from the US Commerce Department, also on Friday. The GDP report measures all economic output from the US economy and the report showed the US economy slowing to just 0.7% annualized growth in the fourth quarter of 2025:
This is much lower than the 4.4% annualized rate in Q3 2025 and lower than the 1.5% rate that analysts expected for Q4. The Bureau of Economic Analysis at the Department of Commerce credited declining exports due to tariff uncertainty as the main driver of the decline[3].
Iran and Interest Rates
Markets are up this week as the Iran war chugs along and we approach the next meeting of the Federal Open Market Committee (FOMC). The FOMC is the arm of the Federal Reserve that determines interest rate policy and will be announcing their latest decision this afternoon at 1:00 PM CT. The decision itself is unlikely to bring drama; as of writing, the bond market is assigning a 99.1% chance of interest rates holding steady[4].
Investors will be more focused on Fed Chairman Jerome Powell’s speech shortly afterwards at 1:30 PM CT. This meeting will be Powell’s second-to-last meeting as Fed Chair, assuming President Trump’s nominee Kevin Warsh is confirmed by Congress in May, and investors will be paying close attention to Powell’s remarks on the current path of inflation. Many analysts worry that a protracted engagement in Iran will exacerbate inflation by increasing oil prices; early price movements support this thesis as oil prices have spiked dramatically over the last two weeks:
Conditions have changed quickly so things may be different by the time you read this, but so far there has been little progress in reaching an end to the Iran War. Iran has expanded its retaliation by striking multiple Gulf states, including a drone attack on the Dubai International Airport. Iran is also still threatening to sink any ship crossing the Strait of Hormuz, one of the main arteries of the global oil shipping network. President Trump has entreated US allies to join the US military in reopening the Strait but has faced resistance from foreign leaders after maligning them for much of last year and during his first term.
Markets are still relatively placid despite growing tensions with the S&P 500, Dow Jones and NASDAQ all down less than 3% on the year. The biggest risk to the markets is Iran making good on its threat to sink a commercial vessel as that would endanger trade through the Strait of Hormuz for the foreseeable future. Inversely, a quick resolution would likely trigger a bounce in markets and send us back to positive territory for the year.
What Else
- Iran’s claim that their military killed Israeli Prime Minister Benjamin Netanyahu appear to be false although details of Netanyahu’s newest video are disputed
- President Trump has demanded that NATO allies support the US in reopening the Strait of Hormuz
- Russian drones struck Ukraine’s capital Kyiv, straining current ceasefire talks
- One Battle After Another won the Oscar for Best Picture
- The first round of March Madness tips off tomorrow
What We’re Reading
An ambitious plan to refill the Great Salt Lake in Utah in time for the 2034 Olympics has become an unexpected cause for political unity between local Republican lawmakers and climate activists; even President Trump has spoken out in favor of the project. Click below to see photos of the barren lakebed and read how officials plan to refill the lake:
What’s Happening Downtown
The OKC Museum of Art is hosting Spring Break Drop-In Art: Paul Reed Extravaganza starting today and running through Saturday, March 21st. This event lasts from 11:00 AM to 4:00 PM each day and features opportunities to create your own art in the style of Paul Reed. Activities are free with purchase of an admission ticket to the museum ($20), click below to learn more:
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Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Bill Daniel, Sam Postich, Jenni Hess