The benefits of diversifying across asset classes as a risk‑management tool are widely accepted, but what’s easily overlooked is that the relative benefits wax and wane over time. That doesn’t invalidate global asset allocation, but it does serve as a reminder that your mileage will vary.
Author Archives: James Picerno
Rate Cuts on Ice as Inflation Expectations Surge at the Short End
Inflation worries have convinced markets that the odds are low for a cut in interest rates this year by the Federal Reserve. Rate hikes are still considered unlikely, but the possibility is back on the table, if only on the margins. The change in sentiment, courtesy of the war in Iran, which has sent energy prices soaring, is weighing on the bond market. The hope is that the conflict will soon end, allowing Middle East oil and gas exports to resume, and thereby tame inflation worries.
Trump’s Strike Freeze Lifts Markets, but the Calm Looks Fragile
President Trump’s announcement of a halt in the strikes on Iranian infrastructure sparked a rise in risk assets on Monday (Mar. 23). It’s unclear if this is a temporary lull or a diplomatic opening that leads to a ceasefire, but risk assets found some breathing room yesterday. Commodities are still the strongest year-to-date performer for the major asset classes, but 2026 results are a bit less lopsided through yesterday’s close, based on a set of ETFs.
Stock Market Searches for a Bottom as War Continues
The Iran war is now in its fourth week, with no sign that the conflict is nearing an end. Conditions for a stalemate or ceasefire may be brewing, but for now no one is blinking. Without even a hint of de‑escalation, the stock market will continue searching for a bottom. When a turning point for the market arrives, it will likely coincide with a sense that geopolitical risk has finally peaked.
Book Bits: 21 March 2026
● Money Beyond Borders: Global Currencies from Croesus to Crypto
Barry Eichengreen
Review via Financial Times
The US dollar’s recent travails — it has fallen more than 10 per cent against other major currencies since the beginning of 2025 — have led to renewed questioning about its future. How long will it remain the world’s premier currency? What might it take to finally knock it off its perch? And, should it fall, what will replace it — a new dominant reserve currency, a basket of quasi-reserve currencies, perhaps even something from the cryptoverse? …
Eichengreen’s suspicion is that, if and when the US dollar in turn loses its mantle, the wounds will more likely be self-inflicted than exacted by a monetary foe. Among the possible fatal harms, he identifies heightened tariffs, America’s escalating fiscal woes, the undermining of Federal Reserve independence, more aggressive and widespread use of financial sanctions and a retreat from longstanding international alliances. The current US president has leaned — sometimes more than leaned — in all these directions.
Steady Today, Uncertain Tomorrow: Iran War Tests US Resilience
The war in Iran is sending shockwaves across the globe, but the US economy has managed to stay remarkably steady so far. How long the relative calm lasts is unclear, and will likely be determined by the duration of the conflict.
Powell’s Pause: A Gamble Wrapped in Uncertainty
The Federal Reserve has a deep pool of resources for analyzing the economy to support its mission to adjust monetary policy to match current and expected macro conditions. But sometimes a central bank’s vaunted research machine offers insights no sharper than whatever you’d get from chatting with a guy waiting at the bus stop. The present moment is one of those times, thanks to the uncertainty surrounding the ongoing war in Iraq.
Commodities Surge, Everything Else Sinks as Iran War Drags On
The pain isn’t equally distributed. It never is, as the fallout from the war in Iran makes clear. Since the attack began on Feb. 28, nearly every major asset class—aside from commodities and cash—has slipped into the red, with losses spreading broadly across global markets through yesterday’s close (Mar. 17).
Prolonged Iran Conflict Starting To Raise Specter of Stagflation
Estimating the timeline for the end game for the war in Iran remains a slippery task. Gaming out the costs, by contrast, is relatively straightforward. Each day the war continues, the outlook turns a bit murkier, and the risk ticks higher for economic harm.
US Q1 GDP Expected To Rebound As Energy Shock Lurks For Q2
Economic output for the first quarter is expected to partially recover from the stall‑speed pace of Q4, but the threat of an energy shock is looming as the war in Iran continues.