Volatility continued to be the driving theme for markets while conflicting messages about a resolution to the Iran war permeated headlines throughout the week. President Trump warned Iran that they had until Monday night to reopen the Strait of Hormuz or he would begin strikes on critical energy infrastructure. By Monday afternoon Trump had signaled a possible end to hostilities following what he called productive talks. Iranian officials quickly denied any talks had occurred, suggesting the comments were meant to ease rising energy prices.
Regarding President Trump's recent messaging on a possible end to the war, Helima Croft, head of global commodity strategy at RBC Capital markets, commented, "President Trump's most effective way of lowering prices continues to be 'over soon' message management – even if facts on the ground point to escalation. Because a corner of the market believes he will do whatever it takes to lower prices ahead of mid-terms, they jump on any signs that the strait will be open any day now." She did warn that "seemingly left out of this equation is any Iranian agency," and that Iran seems "unlikely to accept the current White House term sheet."
Prospects for American consumers continue to get worse after a Gallup poll reported just 28% of workers said now is a good time to find a quality job, with 72% saying it is a bad time. That marks a sharp reversal from mid-2022 when the percentages were inverted. As recently as 2024, just under half of workers replied it was a good time in the same poll. This most recent survey was conducted in Q4 2025, well before the volatility of the Iran war took hold. At the same time, mortgage rates have climbed almost 50 basis points in the last three weeks with the average rate on a 30-year fixed rate note at 6.43%, according to Bankrate. The average rate on a 15-year fixed rate is 5.78%. The rise has been tracking the selloff of the 10-year Treasury note.
In a report that went largely unmentioned by mainstream media sources last week, the Treasury Department issued a report showing the U.S. is effectively insolvent as of the end of fiscal year 2025. With $6.06 trillion in assets and $47.78 trillion in liabilities (not including the unfunded obligations of insurance programs like Social Security and Medicare) liabilities are approximately eight times the value of reported assets. The off-balance sheet Statement of Social Insurance (SOSI) adds $88.4 trillion to the $47 trillion liabilities figure, resulting in $136.2 trillion in total federal obligations. That’s roughly five times the value of total annual U.S. GDP. For context, if you divide those figures by 100 million (remove 8 zeros) they represent a U.S. household who earns $52,000/year and spends $73,000/year. The total unfunded debt amounts to $1.361 million against $60,000 in assets. That – by any reasonable balance sheet metric – would render a company or household insolvent.
The week wrapped up with the Senate passing a deal to fund the remaining components of the Department of Homeland Security, potentially ending the latest partial government shutdown. The deal will leave both sides of the aisle wanting. However, political pressure from long lines at airports seems to have forced their hands. The bill still needs to pass the House and be signed by President Trump before lawmakers leave for spring break.
KEY INDICATORS THIS WEEK
Gas prices – With the supply strangle from the Iran war, the average price for a gallon of gas is $3.99, the highest since 2022.
Import prices – Rose in February (before the Iran war began) by the most since 2022.
Next Week – Jobs week!