Macroeconomics

Since late February 2026, when the US and Israel launched military operations against Iran, geopolitical risks in the Middle East have escalated, causing dramatic shifts in global capital markets. Gold and US Treasury bonds have shown weakening hedging effects, while the US S&P 500 Index has declined 4%, indicating asset repricing. Capital flows have moved toward money market funds with high liquidity, signaling that markets have entered a defensive "cash is king" phase. Bitcoin has posted modest gains but faces continued risks.

The Pentagon has submitted an application to the White House requesting approval for $200 billion in funding for war with Iran, indicating that expenditures far exceed expectations. The skyrocketing war costs have raised concerns, with experts warning that total costs could rise to trillions of dollars. Congress will engage in heated debate over this matter, affecting public welfare and the economy, making it increasingly difficult to control energy markets and household budgets.

Gate News, on March 20, according to data from the Bangko Sentral ng Pilipinas (Philippine Central Bank), the Philippines' balance of payments in February shifted from a surplus to a deficit, with the deficit exceeding 2 billion dollars.

Cloudflare CEO Matthew Prince stated at SXSW that AI bot traffic is expected to surpass human traffic by 2027, noting that AI bots access websites at 1000 times the rate of humans. He emphasized the need for new infrastructure to address this trend and warned that traffic growth will strain data centers.

Morgan Stanley has pushed back its expectations for Federal Reserve rate cuts to September and December, as oil price increases driven by Middle East geopolitical conflicts have raised inflation expectations and constrained the scope for accommodative policy. Market reaction shows weakening expectations for rate cuts, with the timing of future cuts dependent on inflation data and economic performance.

Middle East tensions escalating and surging energy prices have impacted global markets, with Bitcoin experiencing significant price volatility and briefly breaking below $69,000. Federal Reserve policy has intensified market pressure, with analysts believing that rising energy prices will constrain asset performance, particularly Bitcoin. Currently, Bitcoin's trajectory depends on the macroeconomic environment, with $69,000 serving as a key short-term support level.

According to Gate News, a Rune-associated address, co-founder of MakerDAO, recently opened a short position on the S&P 500 index, with positions increasing to $4.66 million. Meanwhile, the address holds $13.6 million in crude oil long positions and $6.1 million in U.S. stocks short positions, totaling over $20 million, possibly betting on economic stagflation.

Escalating Iran conflicts have caused divergence in global oil markets, with US WTI crude stabilizing at 97 dollars, while Middle East spot prices surged significantly, with Omani crude reaching a historic high of 167 dollars. Supply tightness has pressured Europe and Asia, with Strait of Hormuz concerns triggering price volatility. Global energy market imbalances may exacerbate inflation pressures. The US has released strategic petroleum reserves to respond, but this also weakens future response capabilities. Markets expect that long-term oil price divergence will be difficult to sustain.

Bitcoin recently touched $75,000 but failed to sustain the level, pulling back to $74,000, reflecting cautious sentiment among investors ahead of the upcoming Federal Reserve interest rate decision. Geopolitical risks and elevated energy prices have driven inflation higher, affecting market expectations for rate cuts and pushing the timeline for cuts to year-end. Technical analysis shows Bitcoin remains strong but has not confirmed a decisive breakout above the $75,000 level, with limited upside potential in the near term.

Gate News reported that on March 20, NZD/USD (New Zealand Dollar to US Dollar exchange rate) broke through 0.5850, rising to approximately 0.5880. This increase was primarily driven by New Zealand's trade deficit data coming in better than expected.

CF Benchmarks' latest report indicates a significant divergence between Bitcoin price and global money supply growth. Since mid-2025, global M2 money supply has increased approximately 12%, while Bitcoin price has declined 35%. High interest rates and rising energy prices have limited capital inflows. Over the medium to long term, if the financial environment improves, Bitcoin price may have a rebound opportunity.

Bitcoin price plunges sharply to approximately $70,400; BlackRock's Ethereum staking fund surpasses $250 million in assets under management in its first week, with a staking rate as high as 95%. Morgan Stanley has submitted a revised proposal for a spot Bitcoin ETF. U.S. stocks decline significantly due to geopolitical impacts, with market confidence weakening; it is recommended to control leverage ratios for hedging purposes.

Gate News reported that on March 20, according to sources cited by the Wall Street Journal, Saudi oil officials are concerned that oil prices could rise above $180 per barrel. If the energy crisis continues beyond April, Saudi Arabia expects oil prices to surge to $180.

US-Iran tensions are escalating, with markets beginning to price in prolonged conflict, impacting oil, shipping, and supply chain costs. Investors are focusing on hard assets and related resource sectors, while facing stagflation risks. It is recommended to adopt defensive trading strategies and currency diversification.

Gate News reported that on March 19, U.S. new home sales data for January showed that the sales pace had slowed to its slowest level since 2022. The data indicated that new homes in the Bloomington area of Minnesota were starting at 500,000 dollars. New home sales data is one of the important economic indicators for measuring the health of the U.S. real estate market.

Gate News Report: On March 19, recent UK labor market data showed that the average wage growth rate (a metric measuring wage increases) has declined to 3.8%, while the unemployment rate remained stable amid economic uncertainty. This data reflects the latest conditions of the current UK labor market.

On March 19, non-USD currencies rose while the US Dollar Index fell over 1%. Multiple central banks held meetings this week and decided to maintain interest rates unchanged, remaining vigilant about inflationary risks from rising energy prices. Markets are concerned about escalating tensions in Iran and stagflation risks.

Gate News Report: On March 19, the U.S. S&P 500 Index (the benchmark index for the U.S. stock market) reversed early-session losses and recorded gains, while oil prices fell below $93 per barrel. The decline in oil prices provided support for the stock market, easing some inflationary pressures and boosting investor sentiment. This oil price decline occurred against a backdrop of continued market volatility and economic uncertainty.

Rising oil prices due to the US-Iran conflict are heightening inflation concerns, affecting investor behavior and prompting risk aversion in markets, especially cryptocurrencies. Policymakers remain cautious, suggesting potential delays in rate cuts amid worsening inflation forecasts from the IMF.

The private lending market is expected to see default rates rise to 9.2% in 2025, facing liquidity challenges and elevated borrowing costs. Small business default rates have reached 15.8%, though lenders are controlling losses through restructuring. Market expansion is bringing liquidity risks, and economic deterioration could expose underlying vulnerabilities.