Geopolitical tensions and economic uncertainty dominate the markets.

The rise of tensions in the Middle East, particularly around Iran, has dominated today's news. The Prime Minister of Pakistan, Shehbaz Sharif, called for the opening of the Strait of Hormuz, which is meant to be a gesture of goodwill in the face of escalating conflict. Additionally, Iran warned that in the event of an attack on its power plants, its retaliatory actions would target oil facilities in Saudi Arabia and the United Arab Emirates. This potential threat to global oil supply chains could lead to rising commodity prices, which in turn increases inflationary pressure worldwide. These actions are a response to tensions with the USA, which are escalating as the deadline imposed by Donald Trump for reaching an agreement approaches.

The conflict in Iran is impacting the global economy. The Managing Director of the IMF, Kristalina Georgieva, announced that the fund will lower its economic growth forecasts due to the war. She also emphasized that the world is not prepared for further shocks after the COVID-19 pandemic. Increases in energy commodity prices and political uncertainty may contribute to further inflation growth, which puts governments and central banks in a difficult position – balancing economic needs with inflation control.

Although current market expectations suggest that the Fed will keep interest rates at 3.50-3.75% during the upcoming FOMC meeting, growing concerns about global economic stability may influence the central bank's future decisions. In light of geopolitical tensions and potential disruptions in energy supplies, the Fed may be forced to revise its approach to monetary policy to account for new inflationary risks. Investors will therefore closely monitor any signals from the Fed regarding future interest rate moves.

Tomorrow promises to be equally intense, especially in the context of the ongoing situation in Iran and possible market reactions. Investors should pay attention to any new information regarding peace talks and potential retaliatory actions from Iran, as well as comments from Fed representatives that may shed more light on the future of US monetary policy.