[Posted 4:30 PM ET, Friday]
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Edition 1,404
The International Energy Agency, a Paris-based organization, issued a warning today, describing the current energy disruption as the “largest supply shock in modern history,” driven by the escalating tensions in the Middle East that have effectively closed a vital trade passage, accounting for 20% of global oil production and transport, roughly 15 million barrels of crude oil and 5 million barrels of oil products.
“The resumption of transit through the Strait of Hormuz is the single most important action to return to stable oil and gas flows and reduce the strains on markets and prices,” the IEA’s report warns. “In the interim, countries around the world are taking a range of measures to increase supply and to reduce the impact of sharp price rises on consumers.”
The IEA suggests that cutting back on air travel, where alternatives are available, could deliver significant savings.
In response to the ongoing global crisis, several countries have expanded remote work. The Philippines and Pakistan have introduced four-day work weeks for government employees. Thailand and Vietnam are actively promoting work from home. Similar measures were seen across Europe during the 2022-23 energy crisis.
Johannes Rauball, senior crude analyst at intelligence trading firm Kpler, said that if Hormuz remains closed for another two months, supply risks “will rise sharply.”
“The last Middle Eastern barrels enroute to Europe are still arriving, so the immediate impact of lower flows from the Middle East has not yet fully materialized,” Rauball told Euronews.
Meanwhile….
Israeli Prime Minister Benjamin Netanyahu, in a press conference Thursday night, rejected the notion that he had dragged President Trump into the Iran war, implying that he was the junior partner in the joint assault.
“Does anyone really think that someone can tell President Trump what to do?” Netanyahu told reporters. “He didn’t need any convincing,” he added.
“I don’t think any two leaders have been as coordinated as President Trump and I. He’s the leader. I’m, you know, his ally.”
The comment was made in response to a series of actions, such as Israel’s attack on the South Pars gas field in Iran, that is shared with Qatar, which prompted Iran to retaliate against energy infrastructure in other Middle East countries, leading to a new surge in global energy prices, and spurring Gulf allies to call on President Trump to rein in the Israeli prime minister.
The aftermath of the strike left Trump and Netanyahu facing questions on whether they’re entirely on the same page in prosecuting the war that started with a closely coordinate joint attack.
Trump, during an Oval Office meeting Thursday with Japanese Prime Minister Sanae Takaichi, told reporters that he neither agreed with nor approved of Israel’s attack on the world’s largest gas field, which is an energy lifeline for Iran.
“I told him, ‘Don’t do that,’” Trump said of Netanyahu’s decision to strike. “We get along great. It’s coordinated, but on occasion he’ll do something. And if I don’t like it – and so we’re not doing that anymore.”
Netanyahu said that Isreal “acted alone” and that he’s agreed to Trump’s request that Israel hold off on any further attack on Iran’s giant gas field.
We learned today that the Pentagon is sending three warships and thousands of additional Marines to the Middle East, in the second deployment of Marines to the region in the past week. Roughly 2,200-2,500 Marines from the California-based USS Boxer amphibious ready group and 11th Marine Expeditionary Unit are heading to the U.S. Central Command, officials said.
And this morning, President Trump lashed out again at NATO:
“Without the U.S.A., NATO IS A PAPER TIGER! They didn’t want to join the fight to stop a Nuclear Powered Iran. Now that fight is Militarily WON, with very little danger for them, they complain about the high oil prices they are forced to pay, but don’t want to help open the Strait of Hormuz, a simple military maneuver that is the single reason for the high oil prices. So easy for them to do, with so little risk. COWARDS, and we will REMEMBER! President DONALD J. TRUMP”
Tale of the Tape….
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, Mar. 20…$95.00
Nationwide average prices at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular gas $2.98…diesel $3.75
Friday, Mar. 20…regular gas $3.91…diesel $5.15
The price of diesel crossed $5.00 on Tuesday for the first time since Dec. 2022. As I was writing long before the war started, diesel is the lifeblood of the freight, agriculture and construction industries, and its sky-high price will be rippling through the broader economy.
And prices for oil and gas overseas are far higher than here. The global benchmark for crude, Brent, is at $112, highest since mid-2022, and that’s just for starters. In some spots, natural gas prices are multiples of the U.S. price.
—
As the week went down…day by day….
President Trump on Truth Social, Fri., Mar. 13, 6:54 PM
“Moments ago, at my direction, the United States Central Command executed one of the most powerful bombing raids in the History of the Middle East, and totally obliterated every MILITARY target in Iran’s crown jewel, Kharg Island. Our Weapons are the most powerful and sophisticated that the World has ever known but, for reasons of decency, I have chosen NOT to wipe out the Oil Infrastructure on the Island. However, should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision. During my First Term, and currently, I rebuilt our Military into the Most Lethal, Powerful, and Effective Force, by far, anywhere in the World. Iran has NO ability to defend anything that we want to attack – There is nothing they can do about it! Iran will NEVER have a nuclear weapon, nor will it have the ability to threaten the United States of America, the Middle East or, for that matter, the World! Iran’s Military, and all others involved with this Terrorist Regime, would be wise to lay down their arms, and save what’s left of their country, which isn’t much! Thank you for your attention to this matter. President DONALD J. TRUMP”
Trump on Truth Social, Fri., Mar. 13, 2026, 7: 43 PM:
“Iran had plans of taking over the entire Middle East, and completely obliterating Israel. JUST LIKE IRAN ITSELF, THOSE PLANS ARE NOW DEAD! President DONALD J. TRUMP”
The U.S. Embassy in Baghdad urged all American citizens to leave Iraq immediately on Saturday after the embassy was attacked overnight for the second time since the war with Iran started.
The warning said militias allied with Iran had carried out numerous attacks on targets associated with the United States, including diplomatic facilities, American companies and hotels frequented by foreigners. It recommended Americans travel overland to neighboring countries because commercial flights were not operating and warned them not to come to the embassy or a U.S. consulate in the northern city of Erbil.
President Trump on Truth Social, Sat., Mar. 14, 2026, 10:04 AM:
“Many countries, especially those who are affected by Iran’s attempted closure of the Hormuz Strait, will be sending War Ships, in conjunction with the United States of America, to keep the Strait open and safe. We have already destroyed 100% of Iran’s Military capability, but it’s easy for them to send a drone or two, drop a mine, or deliver a close range missile somewhere along, or in, this Waterway, no matter how badly defeated they are. Hopefully China, France, Japan, South Korea, the UK, and others, that are affected by this artificial constraint, will send Ships to the area so that the Hormuz Strait will no longer be a threat by a Nation that has been totally decapitated. In the meantime, the United States will be bombing the hell out of the shoreline, and continually shooting Iranian Boats and Ships out of the water. One way or the other, we will soon get the Hormuz Strait OPEN, SAFE, and FREE! President DONALD J. TRUMP”
In an interview with NBC News, Saturday, Trump threatened to further strike Kharg Island “just for fun,” rejecting the prospect of a swift peace deal with Tehran.
“The terms aren’t good enough yet,” the president said. The Iranian regime wants to make an agreement, he claimed.
After days of conflicting messaging from the White House on how much longer it will continue to wage war on Iran, Trump alleged U.S. strikes had “totally demolished” most of Kharg Island, and told NBC News that its military may hit the site “a few more times just for fun.”
“We’ve totally decimated it,” he said. “Except, as you know, I didn’t do anything having to do with the energy lines, because having to rebuild that would take years.”
Earlier, Iranian Foreign Minister Abbas Araghchi said the Strait of Hormuz was only closed to Tehran’s “enemies.”
[Iran has been moving its crude through the Strait at rates broadly comparable to transit before the war began. Iranian crude exports through the corridor account for nearly three-quarters of the 27.2 million barrels that have left the Persian Gulf since March 1, per data from intelligence firm Kpler. That’s about 1.2 million barrels a day of crude, compared to a pre-war daily level of 1.5 mbd. By contrast, nearly three weeks into the war, cargoes from others in the region added up to just 400,000 barrels a day, versus an average 14 million barrels per day in peace time.]
As the price of oil stayed sky high in relation to where it was last year, President Trump’s demands for a coalition to help reopen the Strait of Hormuz appeared to fall on deaf ears on Monday as allies Japan, Australia and Germany said they were not planning to send navy vessels to the Middle East to escort ships through the critical waterway.
Trump told the Financial Times on Sunday he was expecting China to help unblock the Strait before his scheduled meeting with Chinese President Xi Jinping in Beijing at the end of this month.
“I think China should help too because China gets 90% of its oil from the Straits,” Trump said. “We may delay,” he said, in reference to his visit end of the month if China did not offer support in the Gulf.
Trump also ratcheted up pressure on European allies to help protect the Strait, warning that NATO faces a “very bad” future if its members fail to come to Washington’s aid.
“It’s only appropriate that people who are the beneficiaries of the Strait will help to make sure that nothing bad happens there,” Trump told the FT, arguing that Europe and China are more heavily dependent on oil from the region than the U.S.
“If there’s no response or if it’s a negative response, I think it will be very bad for the future of NATO.”
Monday, Trump disparaged allies that he said had relied too long – and too expensively – on American defense.
Referring to countries that have rebuffed, or reacted coolly, to his appeal for help in escorting ships through the Strait of Hormuz, Trump said he had long believed that “if we ever needed help, they won’t be there for us,” and they were proving his point. He added, “You mean for 40 years we’re protecting you and you don’t want to get involved in something that’s very minor?” noting that Europe, Japan and others depend on oil from the Persian Gulf far more than the United States does.
Sunday, Trump had said he might not make the trip to Beijing if China did not contribute warships to the escort efforts, but in his remarks on Monday he did not link the two things.
“We don’t need anybody; we’re the strongest nation in the world,” Trump said. He suggested his request for assistance in reopening the Strait of Hormuz instead amounted to a loyalty test of America’s allies. “I’m almost doing it in some cases not because we need them but because I want to find out how they react,” he said.
Trump said that “numerous countries have told me that they’re on the way,” but he didn’t name them when asked for the information. “I’d rather not say yet, but we’ll be announcing them.”
Monday was dizzying trying to follow the president’s comments. White House press secretary Karoline Leavitt said on social media that the claims of “mixed messaging” were a “fake narrative.”
Germany’s defense minister, Boris Pistorius, said, “This is not our war; we did not start it.” Top officials of Japan, Italy and Australia said Monday that their countries would not participate in efforts to reopen the Strait.
China and the U.S. wrapped up their sixth round of trade talks in Paris on Monday, with the agenda ranging from a possible extension of bilateral tariff and non-tariff measures as well as bilateral investment.
“China and the U.S. conducted deep, frank and constructive consultations,” Chinese vice commerce minister Li Chenggang said.
Both sides agreed to “continue to maintain the stability of tariffs” and discussed the possibility of establishing a mechanism for promoting bilateral investment, said Li, one of the lead negotiators in the two days of talks.
He said China noted that the United States had introduced “quite a few” restrictive measures against China on the trade and economy front. [South China Morning Post]
Trump then said later Monday that his planned trip to Beijing may be postponed.
Speaking at a news conference at the White House, Trump said the timing of the visit was still under discussion, citing the need to remain in Washington.
“I don’t know, we’re working on that right now. We’re speaking to China. I’d love to, but because of the war, I want to be here. I have to be here, I feel,” he told reporters.
Trump added that the U.S. has asked Beijing that “we delay it a month or so.”
“I’m looking forward to being with him. We have a very good relationship. But because of the war, there’s no trick to it either… We got a war going on. I think it’s important that I be here. So it could be that we delay a little bit, not much.”
If Trump calls off the Beijing summit, it could have negative ramifications for both trade and the overall relationship. It will depend on the narrative.
Although Iran depends on China to buy its oil, the U.S.-China Economic Security and Review Commission that counsels Congress said Beijing is taking a cautious approach to avoid rattling its relationships with Saudi Arabia and the United Arab Emirates and is unlikely to offer Iran support.
Iran’s rulers have unleashed a new crackdown against domestic dissent, arresting people suspected of collaborating with foreign entities and threatening would-be protesters with death to hold back the risk of an uprising.
Iranian security forces have been battered by U.S. and Israeli attacks. Bombing raids have shattered the headquarters and command posts of Iran’s police, the paramilitary Islamic Revolutionary Guard Corps and the plainclothes Basij militia.
But Iranians say security forces are using fear to keep a tight grip on the streets. Armed men ride around on motorcycles brandishing their weapons to intimidate people, residents say, particularly at night.
And then on Tuesday, Israel announced it had killed Iranian security chief Ali Larijani, a key figure in Tehran’s military response, as well as the commander of the Basij, Gen. Gholam Reza Soleimani, in overnight strikes, another massive blow to the country’s leadership.
Iran, however, defiantly fired new salvos of missiles and drones at its Gulf Arab neighbors and Israel.
The announcement of Larijani and Soleimani’s death came after the Israeli military had earlier said it had carried out a “wide-scale wave of strikes” across Iran’s capital and stepped up strikes on Iran-backed Hezbollah militants in Lebanon. Israel also reported two incoming salvos before dawn from Iran at Tel Aviv, and elsewhere, and said Hezbollah targeted Israel’s north.
Israel launched a ground invasion of Lebanon opening a new front in the widening Middle East war. The new campaign raises questions about Israel’s ability to fight on many fronts for a long time, especially with a largely reservist army that is already exhausted by 2 ½ years of war.
The top U.S. counterterrorism official said Tuesday he had resigned over his concerns with the war in Iran, marking the first significant departure from the Trump administration due to the conflict.
“I cannot in good conscience support the ongoing war in Iran,” Joe Kent, director of the National Counterterrorism Center, said in a social media post on X, in which he shared a screenshot of his resignation letter addressed to President Trump. “Iran posed no imminent threat to our nation, and it is clear that we started this war due to pressure from Israel and its powerful American lobby,” he wrote.
In his letter, Kent said he supported the foreign policies that Trump campaigned on over the last three presidential cycles but that the president had veered away from his goals of avoiding “never-ending wars.”
Kent, a former political candidate with connections to right-wing extremists, was confirmed to his post last July on a 52-44 vote.
Aside from his past ties to far-right figures, during his Senate confirmation hearing, Kent refused to distance himself from a conspiracy theory that federal agents instigated the Jan. 6, 2021, attack at the Capitol.
Still, Republicans praised Kent’s counterterrorism qualifications, pointing to his military and intelligence experience.
President Trump rejected Kent’s assessment: “I always thought he was a nice guy, but I always thought he was weak on security, very weak,” the president told reporters. “When I read his statement, I realized it’s a good thing that he’s out, because he said Iran is not a threat. …Every country realized what a threat Iran was.”
Speaker Mike Johnson (R-La.): “There was clearly an imminent threat that Iran was very close to the enrichment of nuclear capability, and they were building missiles at a pace that no one in the region could keep up with,” Johnson told reporters.
Rep. Don Bacon (R-Neb.) said: “Good riddance. Iran has murdered more than a thousand Americans. Their EFP land mines were the deadliest in Iraq. Anti-Semitism is an evil I detest, and we surely don’t want it in our government,” Bacon posted online.
Trump on Tuesday said he was not afraid to put U.S. troops on the ground in Iran, and that the United States did not “need or desire” any help from U.S. allies to open the Strait.
Speaking to reporters, Trump said he was unbothered by the reluctance of NATO countries to support the war that he launched with Israel.
“This was a great test” of NATO countries, he said, speaking alongside Micheal Martin, the prime minister of Ireland. Trump added that the alliance “is making a very foolish mistake” by declining to join efforts to push oil shipments through the narrow waterway by force.
“We helped them, but they didn’t help us,” he continued, complaining that the United States had sent hundreds of billions of dollars in aid to help Ukraine fight off a Russian invasion, most of it under former President Biden, but that Europe failed to offer even mine sweepers to help in Iran.
His comments came hours after Trump voiced similar complaints on social media, claiming that the U.S. relationship with NATO was “a one-way street” while also declaring that the United States didn’t need help.
“Because of the fact that we have had such Military Success, we no longer ‘need,’ or desire, the NATO Countries’ assistance – WE NEVER DID!” he said on Truth Social.
Trump tried to downplay the idea that Israel had influenced his decision to attack Iran, calling Israel “a partner” and asserting, “I was against Iran long before I even thought about Israel being against Iran.”
The president struggled to articulate a vision for a postwar Iran, or define when the U.S. strikes – which he insisted were “just a military operation” and not a war – might cease.
“Look, if we left right now it would take 10 years for them to rebuild, but we’re not ready to leave yet, but we’ll be leaving in the near future,” he said, when asked about his plans for Iran after the fighting concluded.
Trump claimed Tuesday that the United States had accomplished the bulk of its military mission in the first two or three days of the bombing campaign. But he also threatened that the U.S. could wipe out Iran’s electricity and its oil infrastructure at a moment’s notice, either of which would be a significant tactical escalation – and likely hurt Iran’s civilian population further.
Hanging over considerations about next steps is the issue of U.S. boots on the ground.
Trump is considering two actions that would certainly require ground action by American or Israeli forces: Taking over Kharg Island, and the underground site at Isfahan where it reportedly stores most of its 970 pounds of near-bomb-grade nuclear fuel.
Trump told reporters that he was unconcerned that such moves could commit U.S. forces to a Vietnam-like boondoggle in Iran.
“I’m really not afraid of that,” he told reporters. “I’m really not afraid of anything.”
The U.S. military said on Tuesday it had targeted sites along Iran’s coastline near the Strait with powerful “bunker-buster” bombs, saying Iranian anti-ship missiles there posed a threat to international shipping.
Israeli warplanes hit central Beirut in the early hours of Wednesday, destroying apartment buildings in some of the most intense airstrikes on the center of the Lebanese capital for decades, an expansion of the U.S.-Israeli war against Iran.
Lebanese authorities say 900 people have been killed in the country and up to one million forced to flee their homes.
U.S.-based Iran human rights group HRANA said on Monday that an estimated 3,000-plus people have been killed in Iran since the start of the war.
A day after killing Iran’s powerful security chief Ali Larijani, Israel said it had killed another top official, Intelligence Minister Esmail Khatib. [Iran confirmed both deaths.]
Iran retaliated by firing missiles into Israel, killing two people near Tel Aviv.
Wednesday, an Iranian missile killed three Palestinian women in a makeshift beauty parlor, the first fatal attack on Palestinians in the West Bank since the war began. Palestinian officials blamed an errant Israeli aerial defense interceptor.
Iranian Foreign Minister Abbas Aragchi said the United States and Israel failed to understand that the Islamic Republic was a robust political system that did not depend on any single individual.
Israel then hit Iran’s massive South Pars natural gas field, which is shared with Qatar, Wednesday, sparking another surge in oil and gas prices, as Iran retaliated (more on this in “Street Bytes,” where I can attempt to condense all the oil/energy news from the war).
The United States was reportedly informed about Israel’s plans, but did not take part in it. Initially, it wasn’t known if the U.S. agreed with Israel’s action. This was the initial report.
President Trump then posted on Truth Social, Wednesday, 10:05 PM:
“Israel, out of anger for what has taken place in the Middle East, has violently lashed out at a major facility known as South Pars Gas Field in Iran. A relatively small section of the whole has been hit. The United States knew nothing about this particular attack, and the country of Qatar was in no way, shape, or form, involved with it, nor did it have any idea that it was going to happen. Unfortunately, Iran did not know this, or any of the pertinent facts pertaining to the South Pars attack, and unjustifiably and unfairly attacked a portion of Qatar’s LNG Gas facility. NO MORE ATTACKS WILL BE MADE BY ISRAEL pertaining to this extremely important and valuable South Pars Field unless Iran unwisely decides to attack a very innocent, in this case, Qatar – In which instance the United States of America, with or without the help or consent of Israel, will massively blow up the entirety of the South Pars Gas Field at an amount of strength and power that Iran has never seen or witnessed before. I do not want to authorize this level of violence and destruction because of the long term implications that it will have on the future of Iran, but if Qatar’s LNG is again attacked, I will not hesitate to do so. Thank you for your attention to this matter. President DONALD J. TRUMP”
[Israel disputes this narrative, which Trump portrayed again Thursday during comments in the Oval Office.]
In a rare statement, Iran’s new Supreme Leader, Ayatollah Mojtaba Khamenei, said Iran’s enemies need to have their “security” taken away. Khamenei has yet to be seen since he succeeded his father.
His remarks came in a statement issue on his behalf and sent to President Masoud Pezeshkian, after Isael killed Intelligence Minister Esmail Khatib earlier in the week.
Israel pounded Tehran Friday as Iranians marked Nowruz, or the Persian New Year, and as noted above, Prime Minister Netanyahu denied he “dragged” President Trump into the war.
In a press conference Thursday evening, Netanyahu said Iran is being “decimated” and no longer had the capacity to enrich uranium or make ballistic missiles, but a revolution in the country would require a “ground component,” he said, without elaborating.
The U.S. is weighing lifting sanctions on some Iranian oil, as it scrambles to contain the impact of its war in Iran on energy markets.
Treasury Secretary Scott Bessent put forward the idea in a Fox interview, saying it could make more oil available to global buyers.
If put into action, the move would mark a stunning reversal of longstanding American policy – and one with highly uncertain pay-off.
Experts said it was likely to have a limited effect on prices, and could boost funds going to the Iranian regime that the U.S. is attacking.
“To put it mildly, this is bananas,” said David Tannenbaum, director of Blackstone Compliance Services, a consultancy specializing in maritime sanctions. “Essentially we’re allowing Iran to sell oil, which could then be used to fund the war effort.”
—The U.S. Navy’s most advanced aircraft carrier is heading to the Greek island of Crete for repairs after a fire broke out in its laundry room the other day…as in so much for one of our two carriers in the region being able to project power in the war.
The USS Gerald R. Ford was strained to the max as it is, having spent months beyond a standard deployment at sea. Sailor morale has been sapped. They haven’t seen their families since last June. And, this is true, there are issues with the plumbing on the ship. As in, issues flushing the toilet, which the Navy blames on sailors not following proper procedures.
The Pentagon has asked the White House to approve a more than $200 billion request to Congress to fund the war in Iran, in an enormous new ask that is almost certain to run into resistance from lawmakers opposed to the conflict.
The number would far surpass the costs of the administration’s massive airstrike campaign to date and instead seek to urgently increase production of critical weaponry expended as U.S. and Israeli forces have struck thousands of targets over the past three weeks.
There is bipartisan blowback on the request.
—The United Nations warned that as many as 45 million more people could face acute hunger if the conflict in Iran doesn’t ease by the middle of the year, taking the total number to a record high, 363 million, eclipsing the hunger levels that followed Russia’s invasion of Ukraine in 2022.
“If this conflict continues, it will send shockwaves across the globe, and families who already cannot afford their next meal will be hit the hardest,” said World Food Program Deputy Executive Director and Chief Operating Officer Carl Skau.
The WFP said energy and food markets were tightly correlated, with the disruption to maritime traffic in the Gulf rippling out to impact the most vulnerable in countries such as Sudan and Somalia, where prices of essential commodities have already soared.
Aside from rising energy costs, the shutdown of the Strait of Hormuz is doing a number on the price of fertilizer.
Food and fuel make up less than a quarter of the consumer inflation basket in most developed economies, but account for 30% to 50% in many emerging markets. And the Strait of Hormuz carries some 30% of globally traded fertilizers, with Gulf producers’ big suppliers of ammonia and urea, according to the UN. Some fertilizer prices are already up 30% to 40%.
—The Wall Street Journal had an extensive report over the weekend…in part….
“Before the U.S. went to war, Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, told President Trump that an American attack could prompt Iran to close the Strait of Hormuz.
“Caine said in several briefings that U.S. officials had long believed Iran would deploy mines, drones and missiles to close the world’s most vital shipping lane, according to people with knowledge of the discussions.
“Trump acknowledged the risks, these people said, but moved forward with the most consequential foreign-policy decision of his two presidencies. He told his team that Tehran would likely capitulate before closing the strait – and even if Iran tried, the U.S. military could handle it.
“Now, two weeks into the war, Iran’s leaders have refused to back down, and the Strait of Hormuz has emerged as Tehran’s most potent leverage point….
“The White House said Trump understood the risks of launching the war, but was determined to eliminate the national security threat posed by Iran. Before the president approved the operation, he and his advisers discussed options to force the reopening of the strait and use the U.S. Navy to escort tankers through the waterway, the people said….
“Before the operation, Trump was briefed on a Central Intelligent Assessment that removing Supreme Leader Ayatollah Ali Khamenei in U.S. military operations could lead to other hard-liners taking power, according to a senior administration official.
“ ‘The Trump administration has kicked hard, but not destroyed, a hornet’s nest,” said Karim Sadjadpour, an Iran specialist at the Carnegie Endowment for International Peace in Washington.
“Foreign diplomats in Tehran anticipate that Iran will aggressively police the waterway, hoping the high cost to the U.S. will persuade Trump to walk away from the war….
“Allies in the Gulf are privately furious with the U.S., according to diplomats and others familiar with the matter. They blame the Trump administration for triggering a war that put them in the crosshairs and pierced their image of a luxurious, business-friendly locale free of the region’s chaos. Trump has been privately calling those leaders this week, according to a person familiar with the conversations….
“Trump faces two difficult choices, analysts say: End hostilities and leave a wounded regime likely to rebuild its arsenal and terrorize regional allies. Or continue bombing at the risk of broader instability, more casualties and a political backlash among voters who believed Trump would end U.S. involvement in foreign wars, especially in the Middle East.” [Alexander Ward, Lara Seligamn, Alex Leary and Vera Bergengruen / Wall Street Journal]
Editorial / Wall Street Journal, Sunday PM
“Before and after [last June’s] attack, Mr. Trump gave Iran every chance to dismantle its nuclear program and reach a new deal. But even with a U.S. armada in the region, Ayatollah Ali Khamenei insisted on keeping the capabilities to pursue a bomb. He put that above everything. He had done the same with Mr. Obama, and perhaps he thought Mr. Trump would also settle for a bad deal. He was wrong, fatally so for himself and maybe yet for the regime.
“Critics of Mr. Trump’s bombing campaign now say it will motivate Iran to pursue nuclear weapons in earnest. But that’s what it has been doing for years. Critics also say the IRGC will now steer the ship of state, but it’s been doing that since the days of Mahmoud Ahmadinejad. The IRGC’s humiliation of Iran’s President in recent days only lifts that veil.
“No one knows how this war will evolve. But one certainty since June is that the nuclear designs of a fanatical, anti-American regime have been set back years. A ‘race’ to a bomb would now be more difficult, with Israel and the U.S. poised to intervene. Iran’s regime also faces serious economic, domestic and international problems that will last well beyond the war.
“Bill Clinton faced a similar moment of truth with North Korea in the 1990s before it had the bomb, and he chose to trust Pyongyang’s diplomatic promises. North Korea lied and cheated and built a bomb anyway. Now it is building missiles that could reach the U.S. Mr. Trump chose to act instead, after his predecessors didn’t, and that is a service to the world.”
—
Wall Street and the Economy
Prior to the Federal Reserve’s statement and Chairman Jerome Powell’s comments on Fed rate policy Wednesday, we had February producer price data and it was not good; well above expectations, with core PPI, ex-food and energy, up 0.5% and 3.9% year-over-year when 3.7% was expected. Headline PPI rose a whopping 0.7% and 3.4% Y/Y.
Hardly the kind of stuff those looking for rate cuts needed to see.
And as expected, the Fed held the line on interest rates, voting 11-1 to keep the federal-funds rate in a range between 3.5% and 3.75% for a second consecutive meeting.
In new quarterly projections, 12 of 19 meeting participants penciled in at least one rate cut this year, the same as in December, though several officials penciled in fewer reductions.
In the statement from the FOMC, which was essentially identical to January’s, save for the Middle East wrinkle:
“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has been little changed in recent months. Inflation remains somewhat elevated.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the U.S. economy are uncertain. The Committee is attentive to the risks to both sides of its dual mandate.”
The rest of the statement was boilerplate. It’s all about the upcoming data, which on the inflation side will be interesting with the energy shock, the next FOMC meeting being April 27-28.
In the press conference after, Chair Powell said the Fed wasn’t prepared to simply “look through” the surge in oil prices, breaking with the standard energy shock playbook.
Bond yields rose, between just prior to the Fed’s release at 2:00 p.m. ET and the conclusion of Chair Powell’s presser. Stocks continued their declines, which were substantial by day’s end.
Powell made news by opening up on his future at the Fed, saying he’s not going anywhere until the investigation is over.
“I have no intention of leaving the board until the investigation is well and truly over with transparency and finality.”
And he added he will serve as “chairman pro-tem” until his successor is named as the new Fed chair, assumed to be Kevin Warsh.
Which means Powell could remain a voting member of the FOMC well into a Warsh chairmanship, adding a layer of complexity to an already fraught transition.
Prior to the PPI report, and Fed release, President Trump posted on Truth Social:
“When is ‘Too Late’ Powell lowering INTEREST RATES?”
Thursday afternoon, with Japanese Prime Minister Takaichi sitting beside him, President Trump accused Powell of criminal wrongdoing in the costly renovation of the Fed’s Washington headquarters, which is at the heart of the Justice Department’s investigation of Powell and the central bank. But lambasting Powell may only endanger the still-unscheduled Senate confirmation of Kevin Warsh. Powell is saying he’s not leaving.
The Atlanta Fed’s GDPNow barometer for first-quarter growth is at 2.3%.
Freddie Mac’s 30-year fixed-rate mortgage has risen to 6.22%.
No market moving economic data (or earnings) next week…but it remains all about oil and the status of the Strait of Hormuz.
Europe and Asia
Eurostat released the February inflation report for the eurozone, the rate 1.9%, up from 1.7% in January, and 2.3% a year earlier. Ex-food and energy the rate was 2.3%, down from 2.6% Feb. 2025.
Headline inflation….
Germany 2.0%, France 1.1%, Italy 1.5%, Spain 2.5%, Netherlands 2.3%, Ireland 2.5%
Governments throughout Europe and Asia are grappling with how to shield citizens from surging costs if the war is prolonged, but doing so would risk the ire of global debt investors, and Euro bond markets continued to take it on the chin…the British 10-year yield at 5.00%, highest since April 2008, is up from 4.23%, the Friday before the war started hours later; Italy’s 10-year rising from 3.27% to 3.95% over the same time period. Germany’s 10-year closed today at 3.02%, highest since July 2011.
The European Central Bank kept interest rates unchanged at its meeting this week, reaffirming its commitment to stabilizing inflation at 2% in the medium term.
But the ECB raised its inflation forecasts, due to higher energy prices driven by the Middle East war, with headline inflation now projected at 2.6% in 2026.
“The war in the Middle East has made the outlook significantly more uncertain, creating upside risks for inflation and downside risks for economic growth,” ECB President Christine Lagarde said Thursday.
The ECB expects GDP growth of 0.9% in 2026 and 1.3% in 2027.
The Bank of England unanimously voted to keep the Bank Rate at 3.75% on Thursday, with the conflict in the Middle East causing a sharp rise in household fuel and utility costs and raising business expenses. Prior to this shock, domestic prices and wages had been showing continued disinflation, with talk the BOE was going to cut rates.
But the central bank signaled it was prepared to raise interest rates to counter the pickup in inflation if it threatened to become persistent.
“I will be monitoring developments extremely closely and stand ready to act as necessary to ensure inflation remains on track to meet the 2% target,” said BOE Governor Andrew Bailey.
The BOE now expects inflation accelerating to 3.5% later this year, instead of returning to its 2% target as previously expected.
China combines its January and February data for key categories due to the changing date for the Lunar New Year holiday, and for the two months, industrial production was up 6.3% year-over-year, retail sales 2.8%, and fixed-asset investment 1.8%…all three better than expected.
The February unemployment rate was up to 5.3%.
Japan’s February exports rose 4.2%, above consensus.
The Bank of Japan followed the Fed in holding rates unchanged, expressing concern about the impact of the U.S. and Israeli conflict with Iran. “Risks to the outlook include the future course of the situation in the Middle East as well as developments in crude oil prices,” it said.
Street Bytes
–Stocks fell, no reason to go up, the Dow Jones down 2.1% to 45574, the S&P 500 1.9% and Nasdaq 2.1%.
Nasdaq has fallen 9 of the last 10 weeks.
—U.S. Treasury Yields
6-mo. 3.74% 2-yr. 3.89% 10-yr. 4.39% 30-yr. 4.96%
It was an incredibly volatile week in the bond pits. Minutes before the Federal Reserve’s interest rate announcement on Wednesday, the 2-year Treasury was at 3.71%, the 10-year 4.22%. By Thursday morning, the two were at 3.93% and 4.32% as the market took away virtually any hope of a rate cut, until maybe year end.
Bond yields then fell back the balance of Thursday, only to spike anew Friday.
The 10-year yield at 4.39% is the highest weekly close since last July.
–Day by day….
After hitting $100 on West Texas Intermediate overnight Sunday, oil fell back to the $93-$95 level, Monday, on word a few tankers were getting through the Strait of Hormuz. But aside from Iranian vessels bound for China, many of the ships, as reported by a Bloomberg expert I respect, were smaller Indian vessels carrying petroleum products used in items like cooking oil, which is a big deal for people in India.
Just remember, when the Strait does reopen, whenever that is, it won’t just return to normal the next day.
That said, there are going to be wild swings in the price, just as we saw last week when oil, again on a Sunday night, March 8, on thin trading, went up to $120, only to fall to as low as $77 two days later on the false story put out by the energy secretary that the U.S. Navy had escorted a tanker through the Strait.
Going back to last October through late January, WTI traded in a very narrow range of about $56 to $62. I was writing continuously in my Week in Review columns on the global surplus in crude.
But oil closed the day before the war started at $67 as the U.S. put together its massive force in the Middle East, including two carrier groups.
The conflict isn’t going to just end. There will be a new risk premium built into the price of oil. What that premium is the market will determine. Maybe it’s $10, and crude (WTI) trades around $70. Which these days would be a fair price for everyone…consumers and producers.
But more volatility ahead…each headline a potential market mover, including for equities.
The price of diesel hit $5.00 a gallon for the first time since December 2022 as the war in Iran continued to disrupt supplies, placing further pressure on broad swaths of the U.S. economy. Prices have surged faster than most other petroleum-based products because Persian Gulf refineries are major suppliers of the fuel.
Crude oil futures then rose nearly 3% to $96 a barrel, Tuesday, recovering from Monday’s slide, as Iran continued attacks on energy infrastructure across the Middle East. Operations at the Shah gas field in the UAE were suspended, and an Iraqi oil field was also struck by drones and missiles. Loadings from Fujairah (UAE) were again halted, further straining global supply as the war is well into its third week and the near-complete closure of the Strait of Hormuz.
It was a down day on Wall Street, Wednesday, as WTI crude hit $99 a barrel in the morning*, before falling back just a bit, following reports of an attack on Iran’s South Pars gas field, the largest in the world, which is shared with Qatar. Iranian state TV said U.S. and Israeli airstrikes hit South Pars and nearby petrochemical facilities in Asaluyeh, marking the first known strike on Iran’s upstream energy infrastructure in this conflict.
*Brent crude, the global benchmark, hit $110, highest since July 2022.
President Trump said the U.S. could end the war with Iran “in the near future.”
Also, Iraq plans to resume exports via a pipeline to Turkey’s Ceyhan port, though volumes will cover only a fraction of prewar output.
Separately, API (American Petroleum Institute) data showed U.S. crude oil inventories rose by 6.6 million barrels in the week ended March 13th, the most in three weeks, reversing a 1.7 million-barrel drop in the previous week and compared to expectations of a 0.6 million barrel decline. Gasoline inventories, however, fell by 4.56 million barrels, the fifth week of declines and the biggest drawdown since late October. Distillate stockpiles, which include diesel and heating oil, decreased by 1.39 million barrels, following a 2.3 million barrels drop in the previous period. [Source: American Petroleum Institute (API)]
Continuing…West Texas Intermediate overnight Wednesday was up to $100 a barrel, before falling back, with Brent crude, the global benchmark at $119, before correcting…as fresh attacks on key energy infrastructure in the Middle East heightened concerns over disruptions to global oil and gas flows.
Iran launched missile strikes on a Qatari industrial zone, Ras Laffan, housing the world’s largest LNG export plant, causing “extensive” damage*; one of several energy assets Tehran vowed to target following an Israeli strike on Iran’s South Pars gas field.
Iran drones caused fires at two state-owned refineries in Kuwait, and a drone fell at a key energy export terminal in Saudi Arabia. In the UAE, officials said that the authorities had responded to incidents at gas facilities and an oil field caused by debris from missile interceptions.
*LNG from Qatar could be offline for months and, in the worst case, for years, said experts, such as Arne Lohmann Rasmussen, chief analyst at Global Risk Management, who added: “For the gas market, the crisis does not end simply because the war ends and the Strait of Hormuz reopens.” The Ras Laffan LNG plant accounted for about a fifth of global supply prior to the war. At week’s end, Qatar’s energy minister said the country’s export capacity was reduced by 17% and the facilities will take 3-5 years to repair!
In a joint statement after a meeting in Riyadh, foreign ministers for Arab and Muslim countries in the region condemned “deliberate” Iranian attacks on residential areas and civilian infrastructure, including “oil facilities, desalination plants, airports, residential buildings, and diplomatic premises.”
President Trump said he had no prior knowledge of the Israeli attack and urged against further strikes on Iranian energy sites. [Israel begged to differ with Trump’s narrative.]
The president temporarily waived the Jones Act for the next 60 days to help reduce the cost of transporting oil, gas, and other commodities across the U.S., allowing foreign-flagged vessels to operate between U.S. ports, but this will have a minimal impact.
European natural gas prices were already surging after Qatar said that Iranian attacks had damaged natural gas sites.
A Kuwaiti oil refinery came under Iranian drone attack early Friday, the refinery capable of processing some 730,000 barrels of oil per day. It was already damaged Thursday in another Iranian attack. It is one of three oil refineries in Kuwait.
Oil prices fell some Thursday night after Prime Minister Netanyahu said he would hold off on further attacks on Iran’s gas field at the request of President Trump, but then moved higher today as reality hit.
—American oil executives delivered a bleak message to Trump officials in recent days: The energy crisis the Iran war has unleashed is likely to get worse.
In a series of White House meetings and recent conversations with Energy Secretary Chris Wright and Interior Secretary Doug Burgum, the CEOs of Exxon Mobil, Chevron, and ConocoPhillips warned that the disruption to energy flows out of the Strait of Hormuz would continue to create volatility in global energy markets.
Exxon CEO Darren Woods said that oil prices could rise past current elevated levels if speculators unexpectedly bid up prices and that markets could see a supply crunch of refined products, comments echoed by Chevron CEO Mike Wirth and ConocoPhillips CEO Ryan Lance.
Separately, the New York Times reported that the oil tankers the Trump administration has seized are costing the U.S. $tens of millions of dollars – “in one case, $47 million in only three months – and complicates Mr. Trump’s claims of swift financial victories from his military operations targeting Venezuela and Iran.”
The figures were laid bare in U.S. District Court in Washington, where Trump officials detailed the financial burden of maintaining a seized tanker.
Such as Motor Tanker Skipper No. 9304667.
The U.S. seized the tanker and its more than 1.8 million barrels of Venezuelan petroleum on Dec. 10 as it made its way to Asia, and the government has already spent $47 million repairing and maintaining the aging ship, which is only valued at $10 million, federal prosecutors said in a court filling. And it will likely need to spend another $5 million over the next few months to cover insurance and crew, among other costs.
Storing the ship’s oil costs the government $450,000 per month.
The petroleum cargo seized from the ship has a value of $120 million to $135 million, a Justice Department official said.
Should a judge approve a sale of the tanker’s oil, some of the proceeds would go to international terrorism victims harmed by state-sponsored terrorism, prosecutors said.
—Delta Air Lines, American Airlines Group, and United Airlines shares all rose Tuesday, as comments from CEOs at an industry investor conference noted that while jet fuel prices are soaring, the impact on earnings may be less than expected.
Delta said it expects its first-quarter guidance to be within its initial range, and now sees revenue climbing by a high-single-digit percentage, up from a 5% to 7% range back in January. The company cited “demand momentum,” for the hike and said consumer and corporate trends have both accelerated into March. It added Delta was “well positioned to navigate the current environment,” and that it will stay flexible with its capacity if elevated fuel prices persist.
American also raised its revenue growth outlook, now expecting at least a 10% jump in the first quarter, which would be the biggest year-over-year quarterly revenue growth in the company’s history, it said.
However, the “rapid increase in jet fuel prices” means its adjusted loss per share will now come in at the lower end of its 10 cents to 50 cents loss guidance.
United Airlines CEO Scott Kirby said that the carrier could get “into the low double-digit margins” this year, up from its previous forecast.
“I’m going to say the same kind of stuff that everyone else has said today. The revenue environment is really strong,” Kirby said. “We have a goal this year to fully offset the increase in fuel prices, which is about $4.6 billion at the moment, for revenue to fully offset that.”
“The 10 biggest booking weeks of our history have been the first 10 weeks of this year,” Kirby said, though fuel prices have spiked the fastest he has even seen in his career and that while others are expressing a “ ‘this is going to be over soon’ definitiveness,” United is preparing for fuel prices to “stay higher for longer.”
JetBlue Airways also said strong demand was offsetting rising fuel costs and the impact of operational disruptions.
Southwest Airlines reaffirmed the EPS guidance it gave in January.
At the same time, airline CEOs urged Congress to end the partial government shutdown that has led to long airport security lines and disrupted the agency charged with airport security.
They want Congress to fix things so Transportation Security Administration officers, air-traffic controllers, and others in critical airport security roles get paid regardless of the status of federal government funding. This is the second government shutdown in six months requiring essential employees to work without pay.
Hundreds of TSA agents have quit and the number of call-outs are double what they were before the shutdown began last month.
You’ve seen the stories of some airports collecting gas and grocery gift cards, diapers, nonperishable food, and personal items for TSA officers and other federal airport employees working without pay. A few smaller airports may be forced to shut down soon.
—TSA checkpoint numbers vs. 2025
3/19…117 percent of 2025 level
3/18…113
3/17…90
3/16…89
3/15…111
3/14…93
3/13…105
3/12…121
—Nvidia CEO Jensen Huang ushered in the Age of Inference at the company’s annual GTC conference Monday, outlining a huge array of new products, both in hardware and software, geared toward running AI models more quickly and efficiently.
In front of a crowd of more than 30,000 at the SAP Center, home of the San Jose Sharks hockey team, Huang unveiled Nvidia’s new flagship product, which he said would revolutionize inference, the form of AI computing that allows models to respond to user queries.
For years, Nvidia has dominated the business of selling graphics processing units, or GPUs, the powerful chips used to train most large AI models. But over the last year, as AI companies have moved quickly to try to monetize their models and the AI tools build on top of them, customers have asked for better chips that are customized for inference computing, rather than training.
So Nvidia is launching a series of new servers with a new chip called an LPU, language processing unit, developed by Groq, a startup whose top leadership team Nivida acquired in a $20 billion technology licensing deal in December.
“This is the AI future. This is where AI wants to go,” Huang said. “It’s designed for inference, this one workload. And this workload is what drives AI factories.”
The company’s GPUs have typically not been regarded as ideal for inference, because they consume a huge amount of energy and don’t come with enough attached memory to allow models to access the troves of data on which they were trained.
The new system can operate 350 times as fast as Nvidia’s second-to-last generation GPUs, known as Hopper.
Huang said Nvidia expects to sell $1 trillion worth of its high-end chips by the end of 2027, updating earlier guidance that had the company selling $500 billion by the end of 2026.
–Memory chip king Micron Technology reported exceptional second-quarter earnings results Wednesday afternoon.
Adjusted earnings per share soared to $12.20, well beyond the Street’s consensus estimate of $9.19, and up from $1.56 last year. Revenue for the quarter reached $23.9 billion, smashing expectations of $20 billion, and up 196% on the year.
Guidance was equally stunning, with a projection of $33.5 billion in sales and a whopping 81% gross margin for the current quarter. The company also raised its dividend.
There is a severe memory shortage from the AI data center investment boom, concentrated at the top end of memory and storage chips. Sales to data center customers were up 181% in the quarter. Sales to non-data center customers were up 219% from the year before.
Micron and its peers, like Samsung and SK Hynix, are trying to manufacture these chips as quickly as possible, and that’s rippling through the whole memory supply chain, with steep price increases in all types of memory, to the detriment of consumer goods manufacturers.
The shares fell a bit, but the stock has been a rocket-ship the past year.
–Shares in Supermicro plummeted 30% today after an unsealed indictment revealed that the U.S. charged two Supermicro employees and a contractor with smuggling servers, containing Nvidia chips to China, in violation of U.S. export controls.
The U.S. Attorney’s Office for the Southern District of New York charged Supermicro’s co-founder, Yih-Shyan “Wally” Liaw, a U.S. citizen who also serves on the company’s board of directors and as senior vice president of business development. A sales manager in Taiwan and the contractor were also charged.
Prosecutors alleged that the trio was involved in a scheme to send $2.5 billion worth of U.S.-made servers to China between 2024 and 2025.
The indictment said the three people involved sold the AI technology to a pass-through company in Southeast Asia, knowing it would be sent to China.
—FedEx shares surged after the company announced fiscal third-quarter earnings per share of $5.25 from sales of $24 billion, with the Street looking for earnings of $4.15 from sales of $23.5bn.
Guidance went up, too. Management expects fiscal year earnings per share to be between $19.30 to $20.10. The prior range was $17.80 to $19.00.
Higher U.S. domestic volumes, higher prices, and a strong peak shipping season led to the earnings beat. Higher volumes are key, with the freight business mired in a three-year-long recession, and investors hoping for growth in 2026.
Some threats to freight recovery have emerged, however, namely the war in Middle East and $100-per-barrel oil prices.
Tariffs also still remain a headwind, and just overall uncertainty given today’s environment. FedEx is suing for tariff recovery in the aftermath of the Supreme Court’s decision declaring President Trump’s Liberation Day tariffs illegal. Exactly what will happen with refunds remains to be seen.
—America’s biggest banks will be allowed to hold billions of dollars less in capital on their books under a new proposal, a change officials say will free up their ability to lend and compete with private-credit firms and other rivals.
The proposal introduced Thursday would hand a major victory to big banks, which had resisted sharply higher requirements proposed under the Biden administration. Wall Street’s embrace of a second Trump administration had largely centered on the prospect that plans for those stricter requirements would be scrapped.
Institutions with big trading operations stand to benefit more than traditional lenders, which could potentially pit them against one another as they seek final revisions.
Banks have 90 days to comment on the voluminous and technical proposal.
—Amazon.com is planning to sharply cut the number of packages it ships through the U.S. Postal Service, a move that could cost the agency millions of dollars in much-needed revenue.
The e-commerce giant, long the Postal Service’s biggest customer, has already begun ratcheting down its postal volume and wants to reduce it by at least two-thirds by this fall, when its current contract with the agency expires.
USPS delivered more than a billion packages for Amazon last year, close to 15% of all the packages that the Postal Service delivered in the country. Amazon’s guaranteed volumes have been a source of stability for the agency, which has operated at a loss for most of the past two decades. In fiscal 2025, it reported a net loss of $9 billion.
The Postal Service’s losses stem in part from its mandate to deliver to more than 170 million addresses six days a week. The six-day-a-week statutory obligation leads to 71% of delivery routes being financially underwater, the agency has said. Roughly three in five post offices don’t cover the cost of their operations.
Postmaster General David Steiner is asking Congress to raise the Postal Service’s $15 billion debt limit, a number that was established more than three decades ago, to allow reforms of its pension payments and to modify regulations that limit its ability to raise prices.
Amazon now handles a substantial chunk of is own deliveries. It delivered 6.7 billion last year, while the Postal Service delivered 6.6 billion, according to data from ShipMatrix, a parcel-analytics firm. It was the first year Amazon’s parcel volumes exceeded the Postal Service’s volumes.
—General Mills reaffirmed its annual sales and profit forecast on Wednesday after slashing it last month, as pressure on consumer spending and stiff competition muted demand for the Cheerios maker’s pantry staples and snacks.
Broad inflationary pressure and added uncertainty from the Iran war is also squeezing consumer spending, dragging sales of packaged food makers, who are already facing the brunt of change in dietary preferences toward healthier foods, accelerated by the fast adoption of GLP-1 weight-loss drugs.
Last month, General Mills’ forecast cut sparked a selloff across consumer goods companies. Last week, Campbell’s cut its annual forecasts.
GIS said it was facing stiffer competition in protein-centric breakfast products as consumers shift toward higher-protein options, prompting it to roll out new protein-focused products expected to account for about 25% of annual net sales.
For the year, the company expects organic sales to fall 1.5% to 2%. The shares fell 3%.
—Macy’s shares gained 5% after the department store chain said it expects the hit from U.S.-import tariffs to ease in the second half of the year and reported better-than-expected holiday-quarter results, as turnaround efforts under CEO Tony Spring take shape.
Macy’s took a “prudent approach” to its outlook, as it forecast a fall in annual revenue and profit, citing macroeconomic and geopolitical risks that could affect consumer spending.
Under Spring, Macy’s has focused on more full-price sales, reinvesting in high-potential locations, while shuttering underperforming stores, improving its product offerings and loyalty programs.
“We are offering more relevant brands, stronger storytelling and investing in our colleagues so we can better serve the customer,” Spring said.
In the quarter, sales at the Macy’s brand declined 3.2%, including the impact of store closures, though comparable sales rose 0.4%. Higher-end brands performed better, with Bloomingdale’s posting sales growth of 8.5% and Bluemercury rising 2.5%.
The company’s reliance on manufacturing in China exposes it to import duties. While Washington has moved to a uniform 10% tariff following the Supreme Court ruling that struck down broader U.S. levies, companies should still face near-term pressures from inventories sourced at higher rates.
Macy’s expects 2026 net sales of $21.4 billion to $21.7 billion, down from $21.8bn in 2025. Anyalysts were expecting $21.42bn.
—Dollar Tree’s fiscal fourth-quarter adjusted earnings of $2.56 per share narrowly beat estimates, with net sales up 9%.
The retailer issued cautious guidance for the current quarter, projecting adjusted earnings of $1.45 to $1.60 per share.
Comparable sales growth came to 5% for the quarter, essentially in line with expectations.
For the fiscal year, Dollar Tree projects $6.50 to $6.90 a share in adjusted earnings on $20.5 billion to $20.7 billion in sales. Both figures basically in line with projections.
—The Trump administration is set to receive a roughly $10 billion fee from investors in the recently completed deal to take control of TikTok’s U.S. business, delivering it a windfall for keeping the popular social-media app alive in America.
The payment is part of the agreement through which investors friendly with the administration gained control of TikTok’s U.S. operations from Chinese parent ByteDance, people familiar with the matter said.
Oracle, private-equity firm Silver Lake and Abu Dhabi investor MGX, are among those who paid the Treasury Department about $2.5 billion when the deal closed in January and are set to make several additional payments until hitting the $10 billion total, according to the Wall Street Journal, which previously reported that the administration was expected to get a multibillion-dollar fee.
The $10 billion payment would be nearly unprecedented for a government helping arrange a transaction, historians said.
Administration officials have said the fee is justified given Trump’s role in saving TikTok in the U.S. and navigating negotiations with China to get the deal done while addressing the security concerns of lawmakers.
The Journal notes that investment bankers advising on a typical deal receive fees of less than 1% of the transaction value, and the percentage generally gets smaller as the deal size increases. Bank of America is in line to make some $130 million for advising railroad operator Norfolk Southern on its $71.5 billion sale to Union Pacific, one of the largest fees on record for a single bank on a deal.
Vice President JD Vance previously said the new TikTok entity running the U.S. operations is valued at about $14 billion in the deal, which some tech analysts have said dramatically undervalues the company.
–The Wall Street Journal had a piece on retail leasing and service-oriented tenants outpaced goods-based retail leasing for the first time ever, a reversal driven in large part by a proliferation of salons, spas and fitness studies.
Service-based tenants leased just over 50% of total retail square footage in 2025, according to data firm CoStar. Fifteen years ago, service tenants accounted for only 40% of total leasing.
Wellness is a rapidly expanding market in the U.S., totaling $2.1 trillion in 2024, according to the nonprofit Global Wellness Institute, which measures spending on 11 sectors including spas, beauty, nutrition, mental wellness and public health.
—Gold and silver have been through a touch stretch, as surging energy prices driven by the Middle East conflict stoked inflation concerns and dampened expectations for interest rate cuts. Higher energy prices and the intensifying inflation pressures prompted investors to rotate into the dollar and Treasuries at the expense of safe-haven metals.
Gold, in particular, thrives when rates are lower and the opportunity cost of holding the metal is low. When rates are higher, investors tend to ditch the metal in favor of other assets, such as bonds, which offer steady income.
Traders saw a similar dynamic play out in 2022, when Russia’s full-scale invasion of Ukraine led to a surge in energy prices, fanning inflation. Gold fell for seven straight months between April and October of that year.
–I told you I was not renewing my subscription for Investors Intelligence and the Bull/Bear readings a few weeks ago.
Well, it was in the news this week. I’ve written over the years that the sentiment barometer was nowhere as effective as it had been when I started following it in the 1980s and literally started charting it (by hand) since 1990!
So this week, veteran market analyst and president of Yardeni Research, Ed Yardeni, said in an interview that the Bull/Bear reading “worked very well for me in the past,” before adding a big caveat: “It may not work now.”
He should have said it hasn’t really worked for years.
The problem, as Yardeni sees it [I met him when I was at Pru Securities very briefly in 1990], is that in past instances when investor sentiment took a dive, the pessimism was usually associated with a sudden, surprise deterioration in economic fundamentals that in turn triggered stimulative responses from monetary and fiscal policymakers.
This time around, policymakers may be impotent to provide quick remedies to the economic damage being wrought by the war as it chokes off much of the flow of oil and other shipments through the Strait of Hormuz.
“We’re talking about the fog of war, we’re not talking about something that U.S. policymakers can respond to and turn around,” Yardeni said. “Wars are two-sided affairs, and even if the president said, ‘You know what? We won. The Iranians don’t seem to realize it, but we’re leaving.’ Well, the Israelis might not realize it either, and the Iranians may continue to create problems in the Strait of Hormuz.”
—The Oscars drew 17.9 million viewers on Sunday night, a 9 percent decline from last year’s telecast, according to Nielsen.
The ratings snapped a four-year rise for the Oscars and followed declines for this year’s Grammy Awards and Golden Globe Awards as well.
Oscars organizers pushed the ceremony to a later date this year to avoid a conflict with the Winter Olympics, but then they went up against a big World Baseball Classic game, the United States vs. the Dominican Republic, which drew 7.4 million viewers on Fox Sports 1 and Fox Deportes, the network’s Spanish-language sports channel
Foreign Affairs
Russia/Ukraine: A combined missile and drone attack on the Kyiv region killed at least four people and wounded at least 15 overnight into Saturday, according to the head of the regional administration for the Ukrainian capital.
The attack hit four districts, damaging residential buildings, educational institutions, enterprises and critical infrastructure.
The strikes came days after the U.S. postponed peace talks between Russia and Ukraine scheduled for this week, citing the war in the Middle East.
Russia is profiting from a surge in global energy prices, and hopes that the Mideast war will distract attention from Ukraine and deplete Western arsenals.
Ukrainian President Volodymyr Zelensky said last Friday that the 30-day U.S. waiver on Russian oil sanctions amid the Iran war is “not the right decision” and won’t help bring a stop to Russia’s more than 4-year-old invasion of Ukraine.
Earlier this week, Russian and Ukrainian officials both claimed front-line progress, with Ukraine saying it pushed Moscow’s forces back across places on the front line and the Kremlin insisting Russia’s invasion of its neighbor is making progress.
Separately, Zelensky called tying Ukraine’s access to 90 billion euro ($103 billion) in European Union loans to the restoration of the Druzbha pipeline “blackmail.”
“I am simply saying: if we have decided to restore Russian oil supplies, then I want them to know that I am against it,” Zelensky told reporters in Kyiv on Saturday.
“I am not blocking it. But if I am given conditions that Ukraine will not receive weapons, then, excuse me, I am powerless on this issue. I told our friends that this is called blackmail.”
Zelensky noted that barriers often come from Hungary, which has regularly blocked or delayed EU funding and sanctions even “before all these ‘Druzbha’ incidents.”
“This has been a consistent policy of today’s leadership in Hungary, who is constantly looking for reasons to block something and to support Russia a little,” he said.
As Hungary prepares for key elections on April 12, Zelensky said Kyiv will work with any leader in its western neighbor “provided this person is not an ally of Putin.” Hungarian Prime Minister Viktor Orban is considered one of Putin’s closest European allies, and has stoked anti-Ukraine and anti-EU sentiment during his re-election bid.
In an interview with the BBC on Wednesday, Zelensky said Ukraine will face a deficit of missiles it is using to fight Russia due to the war in the Middle East.
The Ukrainian leader said Putin wanted a “long war” because it would weaken Kyiv, with U.S. resources being directed elsewhere.
Zelensky also claimed that President Trump was not on “any side” in the war between Russia and Ukraine and did not want to “irritate” Putin.
He urged Trump and UK Prime Minister Keir Starmer to meet and find common ground, after Trump’s repeated criticism of him.
Zelensky said he had a “very bad feeling” about the impact of the conflict on the war in Ukraine, saying negotiations towards peace are being “constantly postponed. There is one reason – war in Iran.”
“For Putin, a long war in Iran is a plus,” he said. “In addition to energy prices, it means the depletion of U.S. reserves, and the depletion of air defense manufacturers. So we [Ukraine] have a depletion of resources.”
Zelensky said there would “definitely” be a deficit of Patriot missiles which would be “a challenge,” saying the question now was “when will all the stockpiles in the Middle East be exhausted.”
“America produces 60-65 missiles per month. Imagine, 65 missiles per month is about 700-800 missiles per year, produced each year,” he said. “And on the first day in the Middle East war, 803 missiles were used.”
I don’t recall seeing this figure elsewhere.
Zelensky also said President Trump wanted to be a negotiator rather than take any side in Ukraine’s war against Russia’s illegal invasion.
The Ukrainian president said he thought Trump “wants to finish this war” but added that the U.S. president and his advisers had chosen a strategy of close dialogue with Putin, and “not to irritate him because Europe irritated him and Putin does not want to talk to Europe.”
Back to Viktor Orban, Thursday, European Union leaders piled pressure on him to lift his blockade on the vital 90 billion euro EU loan to Ukraine to keep up its fight.
Dutch Prime Minister Rob Jetten said: “We have to be clear: Hungary’s veto is unacceptable, the extra support for Ukraine has to be delivered as quickly as possible. We should not discuss any ‘plan B,’ because then we would give in to Orban’s blackmail, and that is the last thing we should do.”
“He’s using Ukraine as a weapon in his election campaigning, and it’s not good. We had a deal, and I think that he betrayed us,” Finnish Prime Minister Petteri Orpo told reporters.
China: Taiwan saw a surge of Chinese military planes near the island, its defense ministry said Sunday, after a sharp drop in flights over the past two weeks had sparked discussions among observers.
The ministry detected 26 Chinese military aircraft around the island on Saturday, with 16 of them entering its northern, central and southwestern Air Defense Identification Zone. Seven naval ships were spotted around the island.
The increased number of aircraft came after the ministry reported a fall that left analysts scratching their heads about what China’s military may be up to.
Taiwan didn’t report any Chinese military planes that went beyond the median line and entered the zone for a week from Feb. 27 to March 5. After two were detected on March 6, the next four days had none. Such flights resumed in small numbers between Wednesday and Friday.
The drop coincided with the annual meeting of China legislature. While such flights have fallen in the past during major events and public holidays, this year’s fall was more prominent than in the past.
Analysts said the meeting could not be the sole reason behind the recent drop.
Another potential factor could be a desire to calm the waters with Washington weeks before President Trump’s scheduled visit. But now that visit has been delayed.
Separately, Beijing said peaceful reunification will solve Taiwan’s energy supply fears that have been sparked by hostilities in the Middle East, insisting that “the removal of barriers between the two sides of the strait will ensure the smooth flow of resources.”
Chen Binhua, spokesman for the mainland’s Taiwan Affairs Office of the State Council, said peaceful reunification would create enormous opportunities for Taiwan’s economic and social development and bring tangible benefits to the people in Taiwan.
That included “better protection of Taiwan’s energy resources, backed by a strong motherland,” Chen said during a media briefing on Wednesday when asked about concerns in Taiwan about the island’s energy supply amid the Iran war.
You can stop laughing.
Meanwhile, the U.S. intelligence community has dialed back the view of the risk of a Chinese invasion of Taiwan by next year and concluded that Beijing would prefer to take control of the self-ruled island without resorting to force.
The finding is a shift from past U.S. warnings that an invasion could happen by 2027.
“Chinese leaders do not currently plan to execute an invasion of Taiwan in 2027, nor do they have a fixed timeline for achieving unification,” said the annual threat assessment.
The intelligence report, a summary of national security risks released Wednesday by the Director of National Intelligence, did note areas in which Beijing is seen as a threat, as reported by the Wall Street Journal.
China, among other nations, including Russia and North Korea, is developing new, advanced ways to strike the U.S. with missiles, including of the nuclear variety, the report said. China represents the “most active and persistent” cyber threat to the U.S., the “most capable competitor” in artificial intelligence, and has surpassed Russia as the top competitor in space, it said.
China’s military is also continuing to develop plans and capabilities to absorb Taiwan by force if directed to do so, and has made “steady but uneven progress” on those capabilities, the report said.
But it suggested that Beijing views an amphibious assault on Taiwan as risky and likely to fail, particularly if the U.S. intervenes.
I’ve said for years that I’m surprised China didn’t just take out all of Taiwan’s strategic airfields and sue for peace.
North Korea: Pyongyang fired about 10 ballistic missiles toward the eastern sea, South Korea’s military said, staging its own show of force as the rival South conducts a joint military exercise with the United States.
South Korea’s Joint Chiefs of Staff said the missiles were fired from an area in Sunan, the site of Pyongyang’s international airport, and flew about 350 kilometers (220 miles).
Japanese Defense Minister Shinjiro Koizumi said the weapons landed outside the country’s exclusive economic zone and that there were no reports of damage.
The launches came as Seoul and Washington conduct their annual springtime exercises involving thousands of troops.
Cuba: Protesters in Cuba ransacked a Communist Party building following a rally over steep food prices and persistent power cuts, in a rare show of public dissent.
Discontent among Cubans has been mounting as the island is buffeted by rolling blackouts and shortages of food, fuel and medicine, exacerbated by a prolonged U.S. oil blockade.
And then there was a huge island-wide blackout.
Cuban President Miguel Diaz-Canel said in a national broadcast on Friday (prior to the big blackout) that no fuel had entered the country in three months as a result of the blockade.
President Trump said on Monday that Cuba was in “deep trouble” as he threatened a “friendly takeover.”
In another moment, Monday, Trump told reporters that he believed he would have the “honor of taking Cuba.”
“Whether I free it, take it, I could do anything I want with it, you want to know the truth. They’re a very weakened nation right now.”
Afghanistan/Pakistan: At least 400 people were killed, hundreds injured on Monday night after a Pakistani airstrike on a drug rehabilitation center in Kabul, Afghan officials said, in the deadliest attack of the three-month conflict between the two neighbors.
Pakistan claimed responsibility for the strike, but said the target had been an ammunition depot.
The Taliban said it would retaliate, further escalating the risk of all-out war between the countries.
Random Musings
–Presidential approval ratings….
Rasmussen: 45% approve of President Trump’s job performance, 54% disapprove (Mar. 20).
—Federal Communications Commission Chairman Brendan Carr issued a stern warning to broadcasters Saturday, threatening to revoke government-issued licenses if they run what the federal agency deems “fake news.”
“Broadcasters that are running hoaxes and news distortions – also known as the fake news – have a chance now to correct course before their license renewals come up,” Carr wrote in a post on X. “The law is clear. Broadcasters must operate in the public interest, and they will lose their licenses if they do not.”
Carr said “changing course” would be a savvy business decision for broadcasters – though he did not mention any by name – given “trust in legacy media has now fallen to an all-time low of just 9% and are ratings disasters.” It’s unclear what trust metrics Carr is citing, but Gallup found in 2020 that 9% of Americans have “a great deal” of trust in mass media, though another 31% said they had “a fair amount” of trust.
“When a political candidate is able to win a landslide election victory in the face of hoaxes and distortions, there is something very wrong,” Carr said, presumably talking about President Trump, who received 312 electoral votes and 49.9 percent of the national vote in the 2024 presidential election. “It means the public has lost faith and confidence in the media. And we can’t allow that to happen. Time for change!”
Sen. Brian Schatz (D-Hawaii) said Carr’s statement is a “clear directive to provide positive war coverage or else licenses may not be renewed.”
Carr’s comments appeared to build on a separate post Saturday by Trump on Truth Social.
Trump, Sat., Mar. 14, 9:35 AM:
“Yet again, an intentionally misleading headline by the Fake News Media about the five tanker planes that were supposedly struck down at an Airport in Saudi Arabia, and of no further use. In actuality, the Base was hit a few days ago, but the planes were not ‘struck’ or ‘destroyed.’ Four of the five had virtually no damage, and are already back in service. One had slightly more damage, but will be in the air shortly. None were destroyed, or close to that, as the Fake News said in headlines. The New York Times and The Wall Street Journal (in particular), and other Lowlife ‘Papers’ and Media actually want us to lose the War. Their terrible reporting is the exact opposite of the actual facts! They are truly sick and demented people that have no idea the damage they cause the United States of America. Fortunately, as proven by our Great and Conclusive Election Win in 2024, the People of our Country understand what is happening far better than the Fake News Media! President DONALD J. TRUMP”
—Senators moved to speed the nomination of Markwayne Mullin, President Trump’s pick to lead the Homeland Security Department, to the Senate floor, setting him up to take over the agency from Kristi Noem.
The Senate Homeland Security Committee voted 8 to 7, as Sen. Rand Paul, the committee’s Republican chairman, defected from his party in opposition, but Senator John Fetterman of Pennsylvania, a Democrat, backed Mullin.
Mullin could be approved by the full Senate as early as Monday.
Mullin and Paul clashed over the chairman’s accusations concerning Mullin’s temperament and comments he made about experiencing a war zone, even though he has no military background, as well as comments Mullin made after Sen. Paul was assaulted at his home.
—A federal judge in Massachusetts blocked the Trump administration from implementing a series of vaccine decisions made by Health Secretary Robert F. Kennedy Jr. The judge, Brian Murphy, a Biden appointee, suggested in his ruling that the government did not base its decisions on science.
The ruling, which the administration is almost certain to appeal, halted changes Kennedy has set in motion. They include his decision to cut down the number of vaccines recommended to children and restrict access to Covid vaccines. The judge’s move also reversed, for now, all decisions made by the panelists that Kennedy appointed to the vaccine advisory committee.
The ruling came in response to a lawsuit brought by six medical organizations. The groups argued that Kennedy and his appointees had made arbitrary and capricious changes to the childhood vaccine schedule.
—David French / New York Times
“The eternal return of President Trump is a sign of our national sickness, and a recent Pew Research Center study shows us exactly what that sickness is. We despise each other, and demagogues rise when hatred increases. It’s as predictable as night following day.
“In a 25-country survey, which included a cross section of European, Asian, African and America nations, the United States was the only country in which a majority of adults surveyed said that the morality and ethics of their fellow citizens were either bad or somewhat bad. Even countries torn apart by violence and civil strife – countries such as Nigeria and Mexico – had higher views of their fellow citizens.
“We’ve known for a long time that America is deeply polarized, and we’ve known the problem is only getting worse. For example, in a 2022 survey, Pew found that large shares of Democrats and Republicans thought of each other as close-minded, dishonest, immoral and unintelligent, and the measurements were getting worse every year.
“Both sides hate each other so much that it’s almost meaningless to ask who hates whom the most. In the morality and ethics survey I mentioned at the start of the column, Democrats and Democratic-leaning independents were more likely to believe that other Americans were unethical or immoral than Republicans. But in the 2022 survey, Republicans were more likely to believe that Democrats were dishonest, immoral and lazy.
“If you’re a Republican or a Democrat, the best way to imagine the other side’s view of you is to simply mirror your own attitude. They despise you with the same intensity that you despise them. They view you with the same threat and alarm that you view them….
“This approach is profoundly dangerous to our republic. The American constitutional system is, at its heart, a dispute-resolution mechanism. It takes all the differences and divisions inherent in a continent-sized multiethnic, multifaith democracy and channels them into a political system marked by checks and balances and firewalls against tyranny.
“In the United States, there should never be any such thing as a winner-takes-all electoral result. Even the worst losers and everyone else in American politics enjoy the protections of the Bill of Rights and the opportunity to try to win again, very soon, in election cycles that arrive with clockwork regularity, every two years.
“But hatred puts this system to its most severe test – a test we’ve faced over and over again. It is relatively easy to support the civil rights of people you like (even if you disagree with them). It is profoundly difficult to support the civil rights of people you hate.
“Or, as John Adams wrote in his 1798 letter to the Massachusetts Militia: ‘We have no Government armed with Power capable of contending with human Passions unbridled by morality and Religion. Avarice, Ambition, Revenge or Galantry, would break the strongest Cords of our Constitution as a Whale goes through a Net.’
“Restrain those vices and we preserve our republic. Indulge them, and we risk its dissolution.”
–Last Friday, President Trump announced the departure of Richard Grenell, a close ally, as head of the John F. Kennedy Center for the Performing Arts after a tumultuous year that included an exodus of artists and audiences from the Washington cultural institution.
The center is preparing to close on July 4 for a two-year renovation. Trump announced the shutdown after months of headlines about boycotts by patrons and high-profile artists.
–Two of California’s top lawmaker announced Thursday they want to rename Cesar Chavez Day following stunning abuse allegations against the revered labor leader.
Political leaders in states and cities are considering similar moves after the allegations became public, accusing Chavez of sexually abusing girls and the co-founder of the United Farm Workers of America union, Dolores Huerta.
Washington Gov. Bob Ferguson’s office said Thursday that he won’t issue a proclamation honoring Cesar Chavez Day this year. Other states are following suit.
–It was a wild weather weekend, and Monday, in the Midwest with a blizzard and 2-3 feet of snow in parts of Minnesota, Wisconsin and Michigan’s Upper Peninsula. Green Bay, Wis., had its biggest snowfall in 136 years, 26 inches.
Meanwhile, record heat in California is leading to an extremely rapid snowmelt, way too rapid, with temperatures in some parts of the state 20-30 degrees, or more, above normal.
Last weekend, the Sierra Nevada snowpack measured 48% of average for this time of year, according to state data, down from 73% of average in late February.
Lake Tahoe had a ton of snow from the last round of storms, but it had rapidly disappeared and the ski area had many lifts already closed.
Not good for the future, i.e., summer. And then this week, California was in the midst of its worst March heat wave, ever, with a forecast high on Friday in Riverside County of 114, which would break the March national temperature record of 108 in South Texas set in 1954 – and the April national temperature record of 113 in Death Valley, CA.
Tuesday, downtown Los Angeles hit 98, when the March record had been 94 set in 1914. Palm Springs hit 103 (105 in another report I saw), with 100 the record for the March set in 2007.
But then a desert community in southwestern Arizona reached 110 degrees on Thursday, breaking the above-noted national record temp for the month of 108. Cathedral City, near Palm Spring, hit 108.
The National Weather Service in Los Angeles warned about heatstroke risks, especially for those in parked cars where temperatures can rapidly rise.
And out in Hawaii, some areas of Maui received more than 20 inches of rain, with acres of farmland and homes flooded, with a lot more on the way.
In the Alps, more than 100 people have died across the mountains this season in avalanches, highest total in at least eight years.
Although thick, this season’s snow covering has been unstable, contributing to a steep rise in the number of people killed.
—
Pray for the men and women of our armed forces…and all the fallen. The Pentagon identified the six service members who died in the refueling aircraft crash in Iraq…Maj. John Al Klinner, 33, of Auburn, Ala., Capt. Ariana G. Savino, 31, of Covington, Wash., Tech. Sgt. Ashley B. Pruitt, 34, of Bardstown, Ky., Capt. Seth R. Koval, 38, of Mooresville, Ind., Capt. Curtis J. Angst, 30, of Wilmington, Ohio, and Tech Sgt. Tyler H. Simmons, 28, of Columbus, Ohio.
They must never be forgotten.
Slava Ukraini.
God bless America.
—
Gold $4510…Silver $68.10
Oil $97.60….these three very fluid….
Bitcoin $70,155 [4:00 PM ET, Friday]
Regular Gas: $3.91; Diesel: $5.15 [$3.12 – $3.60 yr. ago]
Returns for the week 3/16-3/20
Dow Jones -2.1% [45574]
S&P 500 -1.9% [6506]
S&P MidCap -1.3%
Russell 2000 -1.7%
Nasdaq -2.1% [21647]
Returns for the period 1/1/26-3/20/26
Dow Jones -5.2%
S&P 500 -5.0%
S&P MidCap -0.3%
Russell 2000 -1.8%
Nasdaq -6.9%
Hang in there. Have a beer.
Brian Trumbore
