Energy Shock Drives Inflation Spike
Consumer prices jumped 0.9% in March, pushing annual inflation to 3.3%, largely driven by a surge in energy costs tied to the Iran war. Core inflation remained relatively contained at 0.2% monthly and 2.6% annually, signaling underlying price pressures are more stable. Much of the increase came from a sharp rise in gasoline, while several categories like medical care and used cars saw price declines. The data suggests the Federal Reserve may look past the temporary energy spike and remain patient on interest rates despite inflation staying above target.
Lower Rates Fail to Revive Housing Demand
Mortgage rates dipped slightly to 6.51%, but ongoing economic uncertainty tied to the Iran war continues to weigh on housing activity. Total mortgage applications fell 0.8%, with purchase demand still down 7% year-over-year despite a small weekly increase. Refinancing activity dropped further as higher rates in recent weeks have sidelined many borrowers. While a recent ceasefire announced by Donald Trump may help ease rates, the housing market remains sluggish overall.
Hormuz Blockade Sends Oil Markets Surging
President Donald Trump ordered a naval blockade of the Strait of Hormuz, escalating tensions with Iran and halting tanker traffic through a critical oil route. Crude prices surged above $100 per barrel as markets priced in a severe supply disruption, with analysts warning prices could climb significantly higher. The blockade threatens global supply chains and could worsen inflation and slow economic growth worldwide. While some view the move as a negotiation tactic, it carries high risks of further military escalation and broader geopolitical fallout.
As always, Base Wealth Management remains focused on aligning investment strategies with your long-term goals amid evolving market conditions.
