🚀 US Core Inflation at 3%

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Market Overview
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Year To Date Performances:

1. The Federal Reserve's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) price index, rose 3% annually in February, highlighting a "sticky" inflationary environment even before the full impact of the U.S.-Iran war. While both core and headline figures met Dow Jones consensus estimates, the report underscored a fragile economy where consumer spending rose 0.5% despite a 0.1% dip in personal income. Compounding these concerns, fourth-quarter GDP was revised downward to a meager 0.5% annualized growth rate, fueling fears of stagflation as the central bank balances a 2% inflation target against a cooling labor market and the recent surge in energy costs. Although the February data predates the conflict's peak oil price spikes, tomorrow’s March Consumer Price Index (CPI) report is expected to show a sharp headline jump to 3.3%, reflecting the immediate pressure of $100+ USD per barrel oil on the American economy.

2. The CEO of Abu Dhabi National Oil Company (ADNOC), Sultan Ahmed Al Jaber, warned on Thursday that the Strait of Hormuz remains effectively closed despite the two-week ceasefire between the U.S. and Iran. Contradicting earlier market optimism, Al Jaber clarified that access is currently being "restricted, conditioned, and controlled" by Tehran, which is requiring vessels to obtain explicit military permission before transiting the waterway. This "intelligent control," as described by Iranian state media, has kept ship traffic at a "slow trickle" rather than the full reopening President Trump demanded as a condition of the truce. With approximately 230 tankers currently loaded with oil and stranded in the Persian Gulf, Al Jaber cautioned that the physical supply shock is only beginning to be felt as the final pre-war cargoes reach their destinations, potentially reversing the recent plunge in oil prices if "freedom of navigation" is not immediately restored.

3. Google has significantly deepened its three-decade relationship with Intel by committing to use multiple generations of Intel’s newest Xeon 6 processors to power its artificial intelligence training and inference workloads. This expansion follows a growing industry consensus that CPUs are becoming a critical bottleneck for complex agentic AI, necessitating the "balanced systems" championed by Intel CEO Lip-Bu Tan. While Google continues to develop its own custom TPU accelerators and Arm-based Axion CPUs, this deal reinforces Intel’s resurgence in the U.S. semiconductor landscape, coming on the heels of major 2025 investments from the U.S. government ($8.9 billion USD) and Nvidia ($5 billion USD), as well as Elon Musk’s recent commitment to use Intel for his "Terafab" project.

   Headlines

   1. American Airlines is increasing baggage fees as oil prices rise.

   2. European bond yields are volatile due to interest rate uncertainty.