The war with Iran continued to drive headlines this week as President Trump extended the ceasefire indefinitely after failing to reach terms with Iran. As of this writing, the Strait of Hormuz remains closed to most commercial traffic with the U.S. continuing its blockade of Iranian ports. Brent crude fell as low as $87/barrel last Friday on optimism a deal could be reached. It has now rebounded to over $103/barrel. 

The International Monetary Fund (IMF) downgraded global growth expectations, citing what it described as the most severe energy shock in modern history. The IMF now projects 2026 global growth at roughly 3.1%, down from earlier forecasts, while also raising inflation projections due to higher oil, gas and food prices. Policymakers warned that increases in defense spending, financed largely through deficits, are adding to fiscal strain while offering limited near-term growth support. 

Presumptive Fed Chair nominee Kevin Warsh’s confirmation hearing this week underscored sharp tensions over central-bank independence and inflation policy. Warsh pledged that monetary policy would remain “strictly independent,” denying any commitment to cut rates at the White House’s urging. Democrats aggressively questioned Warsh’s wealth, his shifting rate views and ties to Trump, branding him a potential “sock puppet.” Republicans emphasized Warsh’s crisis-era experience and anti-inflation credentials. Warsh signaled a narrower Fed mandate and less reliance on unconventional tools, leaving his confirmation path politically uncertain as the DOJ indictment of Fed Chair Powell over fraud allegations loomed over the proceedings. 

A recently released Gallup poll showed 47% of Americans rate economic conditions in the U.S. as “poor,” marking a 10% increase since January and matching results from the end of 2025. The poll also noted 33% of U.S. adults say it is a “good time” to find a quality job –tying the lowest reading since the Pandemic – with 63% reporting it was a “bad time.” Thirty two percent of respondents said the economy – including rising inflation, the high cost of living and higher gas prices – was the most important issue affecting them, with other salient topics including immigration and the Iran war. 

A new CNBC survey highlighted growing financial strain on households as higher gas prices ripple through consumer behavior. The poll of 1,000 Americans found nearly 80% have changed their spending habits in response to rising fuel costs, with gas prices up more than 30% since late February and now topping $4 per gallon. As a result, about 60% of respondents said they are cutting back on discretionary spending like dining out, entertainment and travel, while more than half plan to travel less overall. Notably, the impact is spreading beyond non essentials: roughly 40% reported spending less on necessities such as groceries and medical care, and around 30% said they are relying more heavily on credit cards to make ends meet. The survey also points to a gloomy outlook for relief, with over half of respondents expecting elevated gas prices to persist for at least six months, reinforcing concerns that fuel costs will remain a meaningful headwind for consumer spending in the months ahead.

KEY INDICATORS THIS WEEK

Retail Sales- Rose by the most in a year during March, led by a record jump in spending on gas, while nearly every category posted an increase for the month. 
Next week- No changes are expected at the FOMC meeting.