Special Report: Middle East Conflict

As the troubling and fluid events unfold in the Middle East, more investors are asking, “Should we do anything?”

Here are a couple of areas to keep an eye on in the weeks ahead.

The Fed’s next two-day meeting ends on March 18. Speculators are not expecting an adjustment to the short-term rates, but Fed Chair Jerome Powell will almost certainly be asked a question or two about the Middle East in his post-meeting press conference. Powell will likely say that Fed officials are watching.

Inflation is a concern, especially whether higher oil prices will creep into consumer prices in the months ahead. At the same time, the U.S. is considered “energy independent,” which may not shield consumers from rising prices at the pump or in the grocery store.

Corporate reports may reveal whether rising oil prices are putting pressure on profit margins. While the Middle East situation is tragic—and causes terrible destruction—Wall Street often takes a colder look at factors likely to sway corporate sales or profits during the next three months to three years. 

On the international front, some of the most important storylines in the next few weeks may involve what’s happening in the Strait of Hormuz. On March 1, only three tankers sailed through the waterway, compared with more than 50 the day before. Also, keep an eye on whether insurance companies will adjust rates due to heightened risks.

Remember, reacting to short-term volatility has historically proven more damaging than the events themselves. But if the news has caused concern about your risk tolerance, please reach out. 

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