This week will continue to be dominated by developments in the Middle East, though a heavy slate of data releases—including the FOMC March Minutes, February personal income, and March CPI—will compete for attention.
President Trump confirmed Wednesday night that the United States could conclude its involvement in the Iran War within two to three weeks, providing an exit ramp from a conflict that has roiled energy markets since late February. Yet, oil prices remain stubbornly elevated, reflecting concerns about the Strait of Hormuz, which Trump said the US would leave to other countries to reopen. Then again, this weekend, Trump warned Iran that unless the Strait is opened immediately, Monday will be Obliteration Day, when the US will bomb Iran's electric power plants.
The March 17-18 Fed Minutes (Wed) will offer a direct window into how Fed policymakers were thinking about the early stages of the conflict. The March CPI (Fri) will provide the first look at how the surge in gasoline prices has fed through to consumer prices.
Here are the key US economic releases most likely to shape investors' thinking on economic growth, inflation, and the monetary policy path this week:
(1) GDP. Thursday's final Q4-2025 GDP revision is expected to come in at 0.7% (saar), a backward-looking number that is unlikely to move markets. It was depressed by the government shutdown. The more important story is Q1-2026. The Atlanta Fed's GDPNow model has drifted down to 1.6% (chart).
We think that bad weather in December, January, and February contributed to the recent weakness in real GDP growth. During those three months, there was a significant increase in the number of workers who either did not go to work or worked part-time due to worse than usual winter weather (chart).
(2) CPI. The March CPI report (Fri) is the most consequential release of the week. The Cleveland Fed Inflation Nowcasting estimates that the headline and core inflation rates rose m/m by 0.84% and 0.20%, or y/y by 3.25% and 2.60%, up from 2.40% and 2.50% y/y in February (chart).
The historical relationship between oil prices and headline CPI makes the March jump entirely predictable; every major spike in crude oil prices has been followed by a corresponding move higher in headline inflation (charts). We expect oil prices to peak in the next two months; though this, of course, would depend on a speedy resolution in the Middle East.
(3) Unemployment. Friday's payroll employment report surprised to the upside, offering reassurance on the near-term health of the labor market. Initial jobless claims (Thu) have continued to trend lower, with the four-week moving average at 207,800 (chart). So far, there is no evidence in the claims data that the war is weakening the labor market.
(4) Consumer Sentiment. The preliminary University of Michigan Consumer Sentiment survey for April is expected to edge down to 52.0 from 53.3 in March, with expectations already at a depressed 51.7 (chart). Conference Board consumer confidence surprised to the upside last week at 91.8, suggesting sentiment may have more resilience than the consensus implies.
