Markets: flight to safety
Risk aversion spiked as Middle East turmoil hit markets — 10‑year US Treasury yields slipped below 4% and gold rallied about 1.8% on March 20. That shock landed against a muted growth backdrop: US GDP is penciled in around 1.7–2.0% for 2026 while emerging markets, led by China and India, now account for nearly half of global growth, shifting where capital and demand are headed. (markets.financialcontent.com) (cnbctv18.com) (insightfulpost.com) (usluck.com)
The Fed’s March 18 Summary of Economic Projections shows the median FOMC participant now sees real GDP rising 2.4% in 2026, the unemployment rate at 4.4%, and PCE inflation at about 2.7%. (federalreserve.gov) (federalreserve.gov) The Cboe VIX volatility index jumped above the 25 level intraday, hitting roughly 25.8 on March 20 as traders re-priced risk amid Middle East escalation. (financialcontent.com) (markets.financialcontent.com) Brent crude climbed into the low-$100s this week, trading around $108.29 per barrel on March 20 as attacks and supply-route disruption drove a sharp risk premium. (dtnpf.com) (dtnpf.com) The IEA warned the conflict has cut Gulf output materially and pressured flows through the Strait of Hormuz, citing multi‑million‑barrel‑a‑day disruptions to global crude logistics. (iea.org) (iea.org) IMF data mapped by Visual Capitalist show China and India together account for roughly 43.6% of projected global real GDP growth in 2026, concentrating demand and drawing capital eastward. (visualcapitalist.com) (visualcapitalist.com) U.S. 10‑year Treasury futures closed the session near 4.379% on March 20, reflecting large intraday flows into Treasuries even as short‑term Fed expectations shifted. (investing.com) (investing.com) After the Fed left the target range at 3.50–3.75% on March 18, market odds for a June rate cut fell sharply — CME FedWatch showed the chance of a June cut around the high teens (about 18.4%). (federalreserve.gov) (federalreserve.gov)
