The US economy continues to grow despite geopolitical events and the shock of oil surging over $100 per barrel. The US economy has been in growth mode since the 2020 Covid led recession. Economists and market strategists have continued to expect a recession but without visible rot in the economy and with an abundance of jobs and steady improvement in personal income, the economy stays on course. The first quarter was full of changing expectations for inflation, interest rates, and growth. At the beginning of the quarter economists thought sure a recession would emerge, but by mid-quarter those fears had diminished as strong employment and steady consumption continued in America. By the end of the quarter war with Iran had begun and the price of oil suddenly surged over $100 a barrel. (Figure 1). The straight of Hormuz was closed and the extent of the closure has created vast uncertainty about the price of oil and inflationary fears surged again. As a result, interest rates on treasuries rose over 50 basis points from 3.70 to 4.40 for the 10 year treasury. Equity investors at first shrugged her shoulders about a possible recession but by the end of the quarter investors began to sell stocks and markets were down with most equities losing 4 to 8% and bonds declining 1 to 2% during the quarter. MACM’s dynamic growth portfolio lost 2.7%. The markets suffered their first quarterly loss since the first quarter of 2025. Consumer confidence was surprisingly strong even as the war grew more intense and Trump threatened to obliterate Iran and return it to the Stone Age.Read more
