INSIGHTS

March 4, 2026

Q & Amy

Edition 19

Angus: What are investors biggest economic concerns regarding the war with Iran?

Amy: Investors are focusing on the 30% increase in crude oil price since the first of the year and the impact to overall inflation. If inflation expectations increase, it is less likely that the Fed will continue to lower interest rates.

The duration of the price shock is important. The market is indicating the economy can absorb a short-term disruption in oil prices given the US is a net exporter of oil. Longer term concerns revolve around supply chain disruptions and the unmooring of long-term inflation expectations.

Analysts are comparing the current situation to the 1991 oil shock, which proved to be short-lived.

Amy Bush, CFA

Chief Investment Officer

C. Angus Schaal, CFP^®

Senior Managing Director

Angus: In the current landscape, what indicators are most important to your analysis of the market?

Amy: The economic backdrop matters when any type of geopolitical disruption occurs. In this case, the breadth of the US economy has been improving, creating a strong base for GDP growth. Fiscal policy support is still in place, in addition to the lagged impact of 175 basis points (1.75%) of Fed easing.

Angus: Are expectations for GDP growth still achievable?

Amy: We will focus on a few important indicators to help us analyze the economy and any change to earnings expectations. Confidence indicators, both consumer and business, indicate a propensity to spend. The NFIB Small Business Optimism Index has been improving for two years. Weekly unemployment claims can tell us the pace that business confidence is eroding or improving. Credit markets have been subdued but are indicating some turmoil. And lower PE multiples for stocks exhibit the higher risk surrounding earnings.

Uniquely, history indicates this administration is prone to rapid change in policy, highlighting the importance of long-term investing and adherence to your financial plan.

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