Macro Pilgrim's Ledger | Weekly Report
The week that was, macro/policy, the week ahead, plus a bunch of important charts in between.
Global markets remained under significant pressure this week as the Iran war and its disruption to global energy flows continued to drive volatility across asset classes.
Oil crossed $100 per barrel after Iran’s new supreme leader declared the Strait of Hormuz would remain closed, while the IEA coordinated an emergency release of strategic reserves in an attempt to stabilize supply. Energy shares were the standout performers, with the iShares Global Energy ETF reaching its highest level since May 2008.
Broader equity indexes struggled throughout the week. The S&P 500 tested support near its 200-day moving average, the Dow hit new 2026 lows below 47,000 mid-week, and the Russell 2000 continued to underperform. Treasury yields moved higher on inflation concerns despite the risk-off tone, as markets priced the energy shock as an inflation event rather than a growth scare.
Sentiment deteriorated meaningfully. Odds of two or more Fed rate cuts in 2026 collapsed to around 35% from nearly 85% just a month ago, as war-driven inflation expectations pushed the timeline for policy easing well into the future.
“The main purpose of the stock market is to make fools of as many men as possible.” — Bernard Baruch
The Week That Was
The week’s data calendar was anchored by two major inflation reports, both of which arrived largely in line with expectations, though both were immediately viewed as backward-looking given the energy shock already underway.
On Monday and Tuesday, the Treasury conducted its regular short-end bill auctions, selling 13-week and 26-week bills on Monday, followed by a 3-year note auction on Tuesday. These proceeded without notable disruption, though the broader rate environment remained unsettled as oil prices climbed toward $100 per barrel and Treasury yields moved higher on inflation concerns throughout the week.
Wednesday delivered the week’s most anticipated data release. The Bureau of Labor Statistics reported that the Consumer Price Index rose 0.3% in February on a seasonally adjusted basis, putting the 12-month rate at 2.4%, unchanged from January and in line with the Dow Jones consensus estimate.
Core CPI, which excludes food and energy, rose 0.2% for the month and 2.5% year-over-year, also matching forecasts. Shelter was the largest contributor to the monthly increase, rising 0.2%, while food prices rose 0.4% and energy ticked up 0.6%.
The BLS also published February real earnings alongside the CPI release, and the Census Bureau released February business formation data. The 10-year Treasury note auction also settled on Wednesday. Markets reacted with relative calm to the CPI print itself, but yields moved higher later in the session as traders looked past the data and focused instead on the oil price surge, a reminder that the report reflects conditions before the Iran conflict escalated. As one strategist put it, the February numbers were “a relic of the past.”
Thursday brought the 30-year bond auction along with the 4-week and 8-week bill sales. The long end of the Treasury market remained under pressure, with yields elevated as inflation expectations tied to the energy shock kept sellers active.
The week closed Friday with two significant releases. The January JOLTS report showed job openings little changed at 6.94 million, beating the market forecast of 6.7 million and rising from a revised 6.55 million in December. Hires were unchanged at 5.3 million while total separations held at 5.1 million. The quits rate remained at 2.0%, a level it has held for seven consecutive months, reflecting a labor market characterized by low turnover and limited worker confidence.
The Bureau of Economic Analysis also released the January Personal Income and Outlays report, which had been rescheduled from its original February 26 date due to the fall government shutdown. Personal income rose 0.4% in January, disposable personal income surged 0.9%, and PCE increased 0.4%. The PCE price index rose 2.8% year-over-year in January, while core PCE came in at 3.1% annually, above the prior month’s reading and above the Fed’s 2% target.
