The Federal Reserve is steering through one of the most challenging policy environments in years as the war with Iran destabilizes global energy markets and raises uncertainty about inflation and economic activity. The spike in geopolitical volatility leaves policymakers navigating an exceptionally narrow path: tightening too aggressively risks tipping the economy into recession, while easing too soon could reignite inflation. For the near term, the least worst option is to sit tight and leave rates unchanged until the incoming data start to make a strong case for changing the monetary policy bias.
Monthly Archives: April 2026
Prolonged Stress Test Lurks for Global Markets as War Continues
Global markets are entering a sixth week of stress testing as the war with Iran continues with no immediate resolution in sight. The main risk factor remains the closure, or near‑closure, of the Strait of Hormuz, a strategic chokepoint through which roughly one‑fifth of global oil and liquefied natural gas flowed before the conflict began on Feb. 28.
Book Bits: 04 April 2026
● Recession: The Real Reasons Economies Shrink and What to Do About It
Tyler Goodspeed
Interview with author via CNBC
Q: You say recessions are unforecastable. What does that mean? There are a lot of people who try to predict them.
A: In a nutshell, it means recessions are about shocks, and they are shocks we can neither fully anticipate nor effectively hedge against. We have tools to predict recessions, like the yield curve. But when you actually test these tools on the historical record, there are a lot of false positives and false negatives. I’ll admit, I still look at the yield curve just to take a look. I’m not a believer in astrology, but I still take a peek at my horoscope now and then.
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Total Return Forecasts: Major Asset Classes | 2 April 2026
The war with Iran started over a month ago, and could run for several more weeks, according to President Trump’s address to the nation last night. The short-term effects for markets have already been substantial, and more turbulence is potentially brewing for the near-term outlook. But even a month of war has yet to meaningfully change long-term expected returns for the major asset classes overall.
Major Asset Classes | March 2026 | Performance Review
Markets took a beating in March, thanks to the war with Iran. Commodities surged and cash edged higher, but the rest of the major asset classes fell, in some cases sharply, based on a set of proxy ETFs.