This week, markets are contending with renewed geopolitical volatility in the Middle East, signs of moderating productivity growth, hotter-than-expected producer inflation, and emerging liquidity challenges in the private credit sector. This week’s Market Monitor highlights key U.S. data releases and the implications of ongoing policy and global developments. Equity markets posted notable declines, bond yields rose, and commodities—particularly oil—strengthened on supply concerns.  

Market Overview  

U.S. equities experienced a negative week, with major indexes declining approximately 2% as investors grappled with escalating Middle East conflicts, inflationary pressures, and shifting rate expectations. The S&P 500, Dow, and Nasdaq all closed lower, with some indexes breaching key technical levels. Fixed income markets saw Treasury yields increase (10-year approaching 4.39%), while commodities provided a bright spot, driven higher by oil prices amid geopolitical supply risks.¹

Key Economic Releases

This week’s data releases pointed to persistent inflation at the producer level and a notable slowdown in productivity, even as the services sector and other indicators suggest underlying resilience.  

• February 2026 Producer Price Index (PPI): Released last Wednesday, the index for final demand rose 0.7% month-over-month and 3.4% year-over-year, exceeding expectations and signaling building cost pressures that could feed into consumer prices.² Core PPI (excluding food and energy) also showed notable gains.  
• Q4 2025 Productivity and Costs: Nonfarm business sector productivity rose at a revised 1.8% annualized pace, a sharp slowdown from the prior quarter’s 5.2% surge. Output growth was modest, and unit labor costs rose, tempering optimism around AI-driven efficiency gains despite heavy technology investment.³  
• Predictably, the FOMC’s decision to hold rates steady with data-dependent commentary projecting limited cuts amid inflation and war risks, alongside initial jobless claims data reflecting a labor market that remains relatively balanced but still worrysome.⁴

Private Credit Liquidity Concerns

Investor redemption pressures intensified in the private credit space, with several prominent funds announcing gates or caps on withdrawals. Major managers including BlackRock, Blackstone, Blue Owl, and Morgan Stanley faced withdrawal requests far exceeding typical quarterly limits (often 5% of NAV), leading to restrictions to preserve portfolio stability amid a broader liquidity squeeze in the multi-trillion-dollar market. This development highlights risks in semi-liquid private debt vehicles and may prompt a reassessment of allocations.⁵

Trump Administration and Geopolitical Tensions

The Trump administration has continued to emphasize de-escalation in the Middle East conflict, including calls for negotiations and pauses on certain actions. However, developments on the ground been the opposite, with continued escalation including strikes on key energy infrastructure (such as Iran’s South Pars gas field and related facilities) and retaliatory responses affecting shipping routes and allied targets. These events have driven oil prices significantly higher—nearing $100 per barrel—adding inflationary risks and market uncertainty.⁶

Outlook

The combination of hotter PPI readings, a productivity slowdown, private credit liquidity strains, and escalating Mideast tensions creates a more cautious backdrop for investors, even as the broader economy demonstrates pockets of strength. As I am writing this, President is again indicating that there may be an offramp for the US, Isreal, and Iran in the war. Through it all we remains focused long term investment and financial planning and building high-quality, diversified portfolios.  

Best regards,  

Richard Barnett

Chief Investment Officer

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Footnotes:

1. YCharts, Bloomberg News, Markets Daily Newsletter, 3/23/36, https://www.bloomberg.com/news/newsletters/2026-03-23/the-mood-in-markets-is-sell-first-ask-questions-later

2. U.S. Bureau of Labor Statistics, Producer Price Index – February 2026, released March 18, 2026, https://www.bls.gov/news.release/ppi.nr0.htm

3. U.S. Bureau of Labor Statistics, Productivity and Costs – Q4 2025 (revised), https://www.bls.gov/news.release/prod2.nr0.htm

4. Federal Reserve FOMC Statement, March 18, 2026; U.S. Department of Labor, Unemployment Insurance Weekly Claims.

5. Bloomberg News, “Private Credit’s Gate-Crashers Are Forcing Funds Into a Brutal Spot,” March 2026 (various reports on BlackRock HPS fund, Blackstone, Blue Owl, Morgan Stanley, etc.); additional coverage in Forbes and PitchBook.

6. Bloomberg, “Trump Seeks De-escalation in Mideast Conflict,” March 19, 2026; Reuters and Al Jazeera reports on energy facility strikes and responses.  

Researched and compiled with the assistance of Grok4. This newsletter represents our opined general assessment of the market environment at a specific time and is not intended to be a forecast or guarantee of future performance or results. The opinions and statements expressed are intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities or investment strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. The opinions expressed are as of March 24, 2026, and are subject to change without notice. Investing involves risks. Past performance is not a reliable indicator of current or future results, and index returns do not account for fees. It is not possible to invest directly in an index.  

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