U.S. Inflation is Heading Much Higher Than the Fed Expected

     A report from the OECD that has just come out projects that U.S. inflation will hit 4.2% this year, this is much higher than the Fed's original estimate of 2.7%. This gap is mainly be driven by the war in Iran which is disrupting the oil flow from the Strait of Hormuz. Since the Middle East is so important to the global oil supply, the risk of a long-term war has already pushed oil prices past $100 a barrel. This has made everything more expensive for both producers and consumers.

    A big concern is that the Fed may be too optimistic and we end up with higher interest rates for a much longer period than expected. The length of the war in Iran could have a big impact on the housing market and negatively affect mortgage demand. It seems as though all progress that was made on decreasing inflation has been erased by the conflicts in the Middle East.

Source: https://www.cnbc.com/2026/03/26/global-forecasting-group-sees-us-inflation-at-4point2percent-this-year-much-higher-than-fed-estimate.html

Iran War Negotiations and Their Impact on the Global Economy

 Geopolitics and economics share the same bloodstream. The U.S.-Iran standoff makes that impossible to ignore. Trump claims talks are progressing. Tehran says no formal negotiations exist at all. That contradiction isn't just diplomatic noise. Markets don't wait for verified facts. When two sides tell completely opposite stories, uncertainty itself becomes an economic force worth watching.

Oil feels the pressure first. The Strait of Hormuz accounts for about a fifth of the world's oil supply. Even rumors of confusion cause prices to lurch. No blockade needed. The threat alone breeds volatility. Economists call this a negative supply shock. Constrained output pushes prices up and those higher costs bleed into nearly every corner of the economy. The shipping and manufacturing and retail sectors depend on energy resources. When those inputs get pricier, firms pass the cost along. Households end up paying more for the same goods which leads to increased expenses. Real purchasing power quietly erodes. Businesses eyeing expansion tend to freeze when the geopolitical weather looks stormy. Why pour capital into a project when the ground might shift next week?

Financial markets cut both ways though. When whispers of a possible deal surfaced recently, oil prices dipped and equities climbed. A single unconfirmed report moved billions in value within hours. That sensitivity reveals something worth noting. The global economy reacts not just to events but to the anticipation of events. No resolution is visible on the horizon yet. Until clarity arrives, volatility stays baked in. This situation shows how thoroughly politics threads through inflation, investment and growth, even before anything concrete actually happens.

https://www.cnbc.com/2026/03/24/trump-iran-war-negotiations.html

U.S. Cancels Offshore Wind Projects in $1 Billion Deal

 The U.S. government has agreed to pay nearly $1 billion to TotalEnergies to cancel two offshore wind projects planned along the East Coast. Originally intended to expand renewable energy production near New York and North Carolina, the projects were scrapped as part of a broader shift in federal energy priorities. TotalEnergies is now expected to redirect its investment toward oil and natural gas development within the United States.

The move has sparked debate across the energy sector. Supporters believe it will strengthen access to reliable and affordable energy, while critics argue it represents a setback for clean energy progress and a costly use of taxpayer money. The decision highlights the ongoing tension between expanding fossil fuel production and investing in renewable energy for the future. 

https://www.cnbc.com/2026/03/24/us-to-pay-totalenergies-1-billion-to-kill-east-coast-wind-projects.html

The UK and the War in Iran

The whole world has watched the combat between the US and Iran unfold over the past few weeks. This war has affected the economic situation of many countries. One such country is the UK where a national emergency meeting has been called for Monday, March 23, to discuss the situation. The UK’s government is borrowing at their highest level since the 2008 financial crisis. The economic situation is only getting worse as threats are exchanged between the US and Iran. Iran has threatened to attack the water and energy systems of surrounding countries if the US attacks Iran’s energy grid. The UK is facing higher and higher prices since they rely on exported natural gas and fuel. This, along with other economic difficulties, is pushing down the value of British bonds. 

In the upcoming meeting, the issue of how to react to these challenges will be discussed. The Finance Minister has already stated that she believes it is too soon to know what the impact of the war will be and is resisting major actions. The Housing Minister is voicing concerns about “profiteering” from fuel companies and would like to discuss ways to fight this. 

Britain has been facing difficulties with inflation, and the shock to the energy market caused by this war is making this problem far worse. Some economists project that the inflation rate could reach 5% this year. Just last week the government issued a support package to help households whose heat runs on oil. It is now expected that the Bank of England will raise interest rates due to the war (they were projected to make cuts before the conflict). The government is in a difficult position as inflation rises but many call for increased governmental support. 

The recent conflict may be mainly between the US and Iran, but its effects are worldwide. This article only looks at the UK but these effects are being felt throughout the world and are an important aspect of this war which must be considered. 

https://apple.news/AwNGdZd6JQty5oUNFYcc9RQ

The spring housing market is on, but mortgage rates just shot higher. Here’s what to know.

     The housing market this spring has been different than we have normally seen. spring is one of the most popular times to buy a home and there are many homes on the market. But the thing is there aren't more homes on the market because more people are selling homes, its because the homes are taking longer to sell. One of the main reasons being that mortgage rates have gone up by about 6.5% this makes payment for homeowners more expensive. Even though the home prices aren't rising that much the reason for people not buying homes is the increase in interest rates. Builders of homes are also struggling because the cost to make a home has gone up and their final products are taking much longer to sell. Overall because of these higher interest rates its making it harder for producers and consumers when it comes to producing and purchasing a home. 

source: https://www.cnbc.com/2026/03/20/spring-housing-market-mortgage-rates.html

Can We See The End?

     Oil prices ended this past week still above $100 a barrel. With President Trump claiming to have made progress on the Strait of Hormuz, we might finally see a fall in prices. 

    President Trump claims to have given Iran 48 hours from Saturday night to open the Strait of Hormuz for passage. At this point in time, there has not been any sort of movement allowed through the passage. The talks to open the Strait mean that we are more than likely not to see the end of the war in Iran. Ex-Energy Secretary Dan Brouillette says he believes we will see a drop in oil prices in the coming weeks.

    With gas prices staying above $3.50 across most of America, citizens cannot keep up with the prices for much longer. The war in Iran may end in 2 days or 2 years; no one knows. The US government must find a way to lower these prices to keep citizens across the nation from falling behind financially. 

https://www.axios.com/2026/03/22/iran-war-oil-trump-hormuz-strait-threat 

Agricultural and Market Price Volatility (World Economic Forum)

 The war is driving up not just energy prices but also markets for key agricultural inputs like fertilizers, because petrochemical products travel through the same routes affected by the conflict. This has contributed to higher food prices globally, adding inflationary pressure in both developed and developing economies. 

Commodity markets have become more volatile as traders price in the risk of long‑term supply disruption, and countries dependent on energy and food imports face larger fiscal and balance‑of‑payments challenges. This combination of cost pressures and uncertainty can slow global demand and compress economic growth prospects.

source : https://www.weforum.org/stories/2026/03/the-global-price-tag-of-war-in-the-middle-east/?utm

Business and Supply Chain Risks (Reuters / Thomson Reuters)

 

Analysts say the conflict has created the potential for a “dual‑chokepoint” shipping crisis, where disruptions in both the Strait of Hormuz and other Middle East sea routes could significantly slow global trade. Higher insurance costs, freight rate spikes, and rerouting of maritime traffic are already driving up the cost of shipping goods ranging from energy to manufactured products. 

These bottlenecks and logistical challenges increase uncertainty for businesses and reduce efficiency in global supply networks, which can lead to slower investment and production as firms adapt to higher risk and cost structures. This could weaken profits and slow growth in sectors dependent on imported inputs.

source : https://www.thomsonreuters.com/en-us/posts/corporates/iran-war-economic-business-impact/?

1. Impact on Asia’s Economy and Global Growth (Time)

 

The war’s economic effects extend beyond energy markets into broader regional economies, especially in Asia, where many countries import large amounts of oil and gas from the Middle East. Rising energy prices and disruption to trade routes could slow industrial activity, hurt growth, and push inflation higher in Asia, which would then ripple through global supply chains and trade balances. 

Higher prices for fossil fuels and the knock‑on effects on food and transportation costs are also straining household budgets and corporate margins, making it harder for central banks to balance inflation and growth concerns. This could lead to slower global economic expansion as countries deal with costlier inputs and weaker trade performance.

source : https://time.com/article/2026/03/16/us-israel-iran-war-trump-asia-economy-oil-energy-inflation-recession/?

The stakes are enormous: how a prolonged Iran war could shock the global economy Richard Partington

 The article explains that what many initially viewed as a short‑lived conflict has already driven oil prices above $100 a barrel and doubled European gas costs, creating heightened inflation and financial market volatility. Central banks and governments worldwide are warning that sustained energy price shocks could slow growth, hurt industries, and raise living costs, making everyday things like petrol, flights, and fertilizers significantly more expensive. 

A key concern is the disruption of the Strait of Hormuz, through which about one‑fifth of the world’s oil normally flows; if it remains effectively blocked, supplies of oil, gas and critical petrochemical products could tighten further. The article highlights that rising energy and supply chain pressures could ripple into food and manufacturing sectors, dragging down global growth and underscoring how fragile and interconnected the global economy is in the face of geopolitical shocks.

https://www.theguardian.com/news/ng-interactive/2026/mar/22/iran-war-global-economy-donald-trump-oil-prices-inflation?