As the war in Iran continues to escalate, the effective closure of the Strait of Hormuz has sent shockwaves through global markets.

Global markets experienced a sharp repricing of central bank policy expectations this week as investors reassessed the balance between disinflation and renewed inflation risks. After entering March with growing confidence that rate cuts would unfold smoothly in 2026, that narrative shifted abruptly. Rising energy prices tied to geopolitical tensions lifted inflation expectations and prompted markets to scale back confident easing assumptions across the U.S., Europe, and the U.K.

Following the start of the Iranian conflict over the weekend, oil, gold, and the U.S. dollar have surged amid heightened geopolitical uncertainty.

The defining macro event last week was the Supreme Court’s 6–3 decision to strike down President Trump’s global “Liberation Day” tariffs imposed under IEEPA authority, reaffirming that tariff powers rest with Congress rather than the executive branch. The decision overturned a system that had driven average tariff rates close to 25%. In response, President Trump plans to implement a new broad 10% tariff (that may potentially be raised to 15%) under Section 122, citing issues with international payments as the justification.