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US business activity growth hits 11-month low, Iran war pushes up prices

S&P Global's US Composite PMI fell to 51.4 in March, an 11-month low. The Iran war has driven oil prices up, disrupted supply chains, raised corporate costs, and accelerated price hikes, with service sector growth at its weakest in nearly a year. Economists warn of stagflation risks, with Q1 GDP growth possibly only 1.3%.

Treasury
Blockade of Strait of Hormuz could slow US annualized economic growth by 2.9 percentage points in Q2

A latest report from the Dallas Fed indicates that if oil shipments through the Strait of Hormuz remain interrupted in the second quarter, US annualized economic growth would slow by 2.9 percentage points. Nearly 20% of global oil supply passes through the strait, and the potential impact could far exceed that of any oil crisis since 1973. Fed officials warn that surging oil prices could simultaneously push up inflation and unemployment, leaving the central bank in a dilemma.

Treasury
Economic data showed signs of slowing before the Iran conflict, and The Conference Board lowered its 2026 growth forecast

The Conference Board reported on Thursday that January economic indicators showed signs of cooling, and it lowered its 2026 growth forecast by 0.1 percentage points to 2% due to the Iran conflict. In the Leading Economic Index, red flags flashed, including declines in consumer expectations, drops in building permits, and decreases in new manufacturing orders. The Federal Reserve kept interest rates unchanged the same day, but officials were divided over oil price shocks and the inflation outlook.

Treasury
Fed Holds Rates Steady, Iran War Pushes Oil Prices Up and Heightens Economic Uncertainty

The Federal Reserve kept its key interest rate unchanged in its Wednesday decision, but one committee member dissented. The Iran war pushed oil prices to near four-year highs, and the Fed warned of uncertain economic effects. Officials expect one rate cut in 2026 while raising inflation and growth forecasts. Chair Powell said the impact of Middle East events on the U.S. economy remains unclear, and near-term higher energy prices will push up overall inflation.

Treasury
Initial jobless claims fall, easing concerns over weakening job market

Data from the U.S. Department of Labor showed that initial jobless claims for the week ending March 7 fell to 213,000, a decrease of 1,000 from the previous week, partially offsetting pessimism caused by the unexpected contraction in February nonfarm payrolls. However, economists cautioned that weak hiring activity indicates there is still slack in the labor market, with new entrants facing particular difficulty in finding jobs.

Treasury
Costco faces customer lawsuit demanding refund of tariff surcharges

Illinois customer Matthew Stockov sued Costco in federal court on Wednesday, alleging that after tariffs imposed by the Trump administration under the International Emergency Economic Powers Act were ruled illegal by the Supreme Court, Costco still passed on tariff costs to consumers through price increases, constituting unjust enrichment. The lawsuit demands that Costco refund the overcharged tariff surcharges or share the tariff refunds it received.

Treasury
Survey: Confidence of CEOs at major U.S. companies rebounds, with plans to increase capital spending and optimistic sales outlook

A survey released Wednesday by the Business Roundtable showed that CEO optimism at major U.S. companies rebounded significantly this quarter, with plans to increase capital spending over the next six months and expectations of sales growth. The CEO optimism index rose by 9 points quarter-over-quarter to 89, surpassing the historical average of 83. The survey concluded on March 6, after the Supreme Court rejected most of the Trump administration's tariffs and following the outbreak of the Iran war.

Treasury
Iran Conflict Drives Oil Above $100, Fueling Stagflation Concerns

The Iran war has triggered a surge in oil prices, with Brent crude briefly topping $117 per barrel on Monday before retreating below $100 after G7 pledged to tap reserves. Analysts warn of potential stagflation, while U.S. consumers face higher gas prices and rising borrowing costs.

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