IGA Capital Weekly Economic Update (wartime edition)

Mar 2, 2026

Good evening from Dubai,

War lands in UAE. And apart from a few big 'booms' our staff and families are thankfully safe and sound, albeit forced to stay on the ground with airspace currently closed. As of Sunday March 1st, the UAE Ministry of Defense reports 165 ballistic missiles, 2 cruise missiles, 541 drones in two days, the majority of which were intercepted and destroyed. Meanwhile the pool is still open and the weather is great!

JP Morgan is predicting a 10% premium on gold, with gold surging immediately following the attack on Iran led by Israel. And while the Straight of Hormuz is not officially closed, markets have begun pricing in the risk on global fuel trade.

Global equities experienced a challenging week, with the S&P 500 recording its worst monthly performance since April, driven by a confluence of "risk-off" factors, including AI jitters, tariff uncertainty, private credit spillover fears, sticky inflation, and escalation in the Middle East. This turmoil sparked a massive flight to safety, resulting in Treasuries logging one of their best weeks in recent memory, with the 10-year yield breaching 4% for the first time since November. This divergence between stocks and bonds (up 0.2% and up 1.5% for the month, respectively) is a relatively unusual occurrence outside of recessions, underscoring Treasuries’ role as the premier haven in turbulent times.

Fixed Income and Federal Reserve

• Treasury Yields: The 10-year yield fell to its lowest level since April amid the safe-haven demand, closing below 4% for the month. The policy-sensitive 2-year yield also fell to its lowest level since 2022.

• Fed Outlook: The high bar for additional easing remains due to persistent price pressures, with core Personal Consumption Expenditures (PCE) ticking up to 3.0%. Markets have repriced, with the odds of a June rate cut falling below 50%.

• Implied Fed Funds Rate (as of 3/2/26):

  • Next FOMC Meeting (March 18th): 3.629%

  • Mid-Year 2026 (June 17th): 3.502%

  • Last Meeting of 2026 (December 9th): 3.067%

• Analyst 10-Year Treasury Forecast (Median): The median forecast for the 10-Year Treasury remains relatively stable for the year: Q1 2026 at 4.15%, Q2 2026 at 4.10%, Q3 2026 at 4.12%, and Q4 2026 at 4.13%.

Commercial Real Estate (CRE) Agency Pricing

• Fannie Mae DUS - 10-Year Fixed Rate: For Tier 2 (1.25x DSCR/80% LTV), the current Gross Rates range from 5.17% to 5.57% .

• Note: Tighter pricing is potentially available for deals that qualify as "mission rich".

Commodity Update

• Gold: Climbing above $5,400 per ounce.

• Oil (Brent Crude): Trading around $82 per barrel.

• Oil (WTI Crude): Trading near $73 per barrel.

• Context: Escalating Middle East tensions are keeping oil prices elevated and fueling risk-off sentiment, which has driven investors toward safe-haven assets like gold. Analysts are flagging the potential for Brent Crude to surge toward the $80–$85 range and even $100 per barrel.

  
  

Key Economic Releases This Week

The February jobs report is considered critical for the Fed’s path and will be the focus this week.

• Wednesday, March 4: ADP Payrolls; ISM Services

• Friday, March 6: Nonfarm Payrolls / Unemployment Rate; Retail Sales

• Next Week: Consumer Price Index (CPI) on March 11th; Personal Consumption Expenditures (PCE) and Gross Domestic Product (GDP) on March 13th

Regards,

Joshua Hawley