Comments based on information available as of 5:30 am CT on 3/27/2026
Growth – Less Margin for Error
After a strong second and third quarter last year, the economy lost momentum in the fourth quarter—and there wasn’t much of a bounce to start 2026. Real activity has remained positive, but forward momentum is clearly softer. Consumers are feeling squeezed by still‑high prices and high borrowing costs, while businesses are facing rising energy and transportation expenses. That combination leaves less margin for error, and it makes second‑quarter growth look increasingly shaky if the oil price shock doesn’t dissipate.
Inflation – Reversing Course
Inflation had been moving in the right direction, but that progress now looks fragile. The main issue is energy. Higher oil and gas prices are pushing headline inflation back up, even if core components remain comparatively better behaved. Energy doesn’t just show up at the pump. It seeps into shipping, utilities, and production costs. That raises the risk that inflation momentum could reverse, even if the underlying demand picture is less robust than it was a year ago.
Policy – It Ain’t Over Till It’s Over
Policy signals around Iran continue to shift. President Trump’s tone has softened at the margin, with the latest being that he is refraining from ordering attacks on Iran’s energy infrastructure until April 6. That matters, because it reinforces that the outcome here is not a natural consequence of time passing—it’s a choice. Yogi Berra’s line fits: “It ain’t over till it’s over.” Markets are swinging between hoping for resolution bracing for a new reality of curtailed oil output. Until decisions are made, uncertainty remains a binding constraint on confidence.
Looking Ahead – Discretion Is the Better Part of Valor
This is not an environment that rewards rash decisions. With growth more fragile, inflation at risk of re‑accelerating, and policy outcomes highly discretionary, restraint matters. As the old saying goes, discretion is the better part of valor. For investors and policymakers alike, patience, diversification, and risk awareness are more effective than bold bets made on incomplete information.
