Treasury
Powell: Stable Long-Term Inflation Expectations Allow Fed to Hold Rates
Federal Reserve Chair Jerome Powell said on Monday that stable long-term inflation expectations enable policymakers to keep borrowing costs unchanged while observing whether the Iran war triggers public concerns about future price pressures. He noted that the conflict's impact on the economy remains unclear, but the central bank is prepared to respond to any signs of labor market weakness or rising inflation pressures.
Consumer Confidence Index Falls 6% Month-over-Month: Pressured by Stock Market Declines and Rising Oil Prices
Data released by the University of Michigan on Friday shows that the U.S. consumer confidence index fell 6% month-over-month this month, hitting a new low for the year. The Iran conflict pushed up oil prices and impacted the stock market, causing households' short-term economic expectations to plummet by 14% and personal financial outlook expectations to drop by 10%. Regarding inflation expectations, the one-year inflation expectation rose to 3.8%, the largest single-month increase since April 2025. Federal Reserve Chairman Powell stated that he will closely monitor changes in inflation expectations.
OECD: Iran war pushes up energy costs, US inflation to surge to 4.2% this year
In its latest interim economic outlook, the OECD warned that energy supply shocks triggered by the Iran conflict will push US inflation to 4.2% and drag economic growth down to 2%. This forecast contrasts with the optimistic expectations of Federal Reserve officials, highlighting the complex challenges facing monetary policy.
CFO Uncertainty Concerns See Largest Quarterly Increase, Economic Optimism Edges Up
According to surveys released Wednesday by the Federal Reserve Banks of Richmond and Atlanta, CFO concerns about uncertainty increased more in the first quarter than any other worry, even as economic optimism improved slightly from the previous quarter. The surveys show tariffs and trade policy remain the top concern, followed by labor quality/availability and demand/sales/revenue. Uncertainty was the only major concern with a higher mention rate than in the fourth quarter of 2025.
US business activity growth hits 11-month low, Iran war pushes up prices
S&P Global's US Composite PMI fell to 51.4 in March, an 11-month low. The Iran war has driven oil prices up, disrupted supply chains, raised corporate costs, and accelerated price hikes, with service sector growth at its weakest in nearly a year. Economists warn of stagflation risks, with Q1 GDP growth possibly only 1.3%.
Blockade of Strait of Hormuz could slow US annualized economic growth by 2.9 percentage points in Q2
A latest report from the Dallas Fed indicates that if oil shipments through the Strait of Hormuz remain interrupted in the second quarter, US annualized economic growth would slow by 2.9 percentage points. Nearly 20% of global oil supply passes through the strait, and the potential impact could far exceed that of any oil crisis since 1973. Fed officials warn that surging oil prices could simultaneously push up inflation and unemployment, leaving the central bank in a dilemma.
Economic data showed signs of slowing before the Iran conflict, and The Conference Board lowered its 2026 growth forecast
The Conference Board reported on Thursday that January economic indicators showed signs of cooling, and it lowered its 2026 growth forecast by 0.1 percentage points to 2% due to the Iran conflict. In the Leading Economic Index, red flags flashed, including declines in consumer expectations, drops in building permits, and decreases in new manufacturing orders. The Federal Reserve kept interest rates unchanged the same day, but officials were divided over oil price shocks and the inflation outlook.
Initial jobless claims fall to two-month low as layoffs and hiring both slow
U.S. initial jobless claims fell to a two-month low last week, indicating limited layoffs but also sluggish hiring activity. Federal Reserve Chairman Jerome Powell stated that the labor market is in a "zero-growth equilibrium" and pointed to downside risks.
Fed Holds Rates Steady, Iran War Pushes Oil Prices Up and Heightens Economic Uncertainty
The Federal Reserve kept its key interest rate unchanged in its Wednesday decision, but one committee member dissented. The Iran war pushed oil prices to near four-year highs, and the Fed warned of uncertain economic effects. Officials expect one rate cut in 2026 while raising inflation and growth forecasts. Chair Powell said the impact of Middle East events on the U.S. economy remains unclear, and near-term higher energy prices will push up overall inflation.
Initial jobless claims fall, easing concerns over weakening job market
Data from the U.S. Department of Labor showed that initial jobless claims for the week ending March 7 fell to 213,000, a decrease of 1,000 from the previous week, partially offsetting pessimism caused by the unexpected contraction in February nonfarm payrolls. However, economists cautioned that weak hiring activity indicates there is still slack in the labor market, with new entrants facing particular difficulty in finding jobs.