March 23 Financial Breakfast: Expectations of a Fed rate hike intensify; gold prices battle for the $4500 mark; Middle East tensions support oil prices; Trump threatens attacks on Iranian power plants.
2026-03-23 07:18:31
On Monday (March 23, Beijing time) in early Asian trading, spot gold was trading around $4,500 per ounce. Gold prices have fallen for three consecutive weeks as market expectations for a Federal Reserve rate hike have intensified, and a stronger dollar and US Treasury yields have dragged down gold prices. US crude oil was trading around $98 per barrel. Oil prices rose sharply on Friday as tensions in the Middle East continued to escalate. Trump threatened Iranian power plants over the weekend, and Iran presented six conditions for ending the war.
U.S. stocks plunged on Friday, with the S&P 500 closing down 1.51% at 6,506.48, its lowest level in six months; the Nasdaq fell 2.01%, and the Dow Jones Industrial Average dropped 0.96%. All three major indexes recorded their fourth consecutive weekly decline, falling below their 200-day moving averages, due to the ongoing conflict in the Middle East and escalating inflation concerns. As the war between the U.S.-Israeli coalition and Iran entered its fourth week, market expectations for a prolonged conflict and a possible interest rate hike by the Federal Reserve intensified.
The energy sector rose for the 13th consecutive week, driven by geopolitical events, while utilities and real estate led the declines. Trading volume surged significantly on the day, coinciding with a "Triple Witch" spell.
In terms of individual stocks, tech giants such as Nvidia and Tesla fell by more than 3%, while the market also focused on the continued weakening of US Treasury bonds and the repricing of the possibility of interest rate hikes in the interest rate futures market.
Gold prices fell 1.8% on Friday, with spot gold closing at $4,563.64 per ounce. It had risen as much as 1% during the session, but turned lower due to a stronger dollar and higher U.S. Treasury yields.
Reports indicate that the U.S. military is sending thousands more Marines and sailors to the Middle East, exacerbating market concerns about rising oil prices, inflation, and the ensuing increase in interest rates.
Independent precious metals traders noted that precious metals prices fluctuated wildly last week due to concerns about interest rate hikes, with gold prices dragging down before the weekend. While gold is generally seen as a hedge against inflation and uncertainty, rising interest rates have diminished its appeal. The market also anticipates that the European Central Bank and the Bank of England may raise interest rates as early as April. Spot silver, platinum, and palladium also recorded declines last week.
International oil prices surged on Friday, with Brent crude futures settling at their highest level since July 2022. May Brent crude futures closed up 3.26% at $112.19 per barrel, and rose approximately 8.8% last week, influenced by the continued escalation of tensions in the Middle East.
Iraq declared force majeure on all oil fields developed by foreign oil companies, while the US deployed thousands more Marines and sailors to the Middle East, further escalating the situation with Iran. Analysts point out that expectations of prolonged disruptions to shipping through the Strait of Hormuz and supply shortages are keeping oil prices high.
The market is also focused on the unresolved conflict between the US and Israel over Iran, the attack on Iran's energy infrastructure, and the subsequent strikes against neighboring countries, which have further exacerbated supply concerns.
US President Trump posted on social media on the 21st that if Iran does not fully open the Strait of Hormuz without any threats within 48 hours, the United States will strike and destroy all of its power plants.
The dollar rose on Friday but is still on track for a weekly decline against major currencies. Investors reduced their bets on a Federal Reserve rate cut as rising energy prices pushed up inflation.
Since the start of the US-Israel war against Iran, Brent crude futures have risen by about 50%, with the market widely believing that the Federal Reserve's prospects for interest rate cuts this year are slim, while other major central banks are shifting towards a more hawkish stance. The euro, yen, pound, and Swiss franc all recorded weekly gains against the dollar.
The dollar index rose about 0.26% to 99.59, but still fell 0.94% last week, its biggest weekly drop since late January. The European Central Bank and the Bank of England both warned of inflationary pressures, the Bank of Japan left room for a rate hike as early as April, and the Reserve Bank of Australia raised rates for the second consecutive month.
The probability of the Federal Reserve keeping interest rates unchanged in April has fallen to 87.6%, while expectations of a rate hike continue to rise.
According to the latest data from CME's "FedWatch," the market expects an 87.6% probability that the Federal Reserve will keep interest rates unchanged at its April meeting, while the probability of a 25 basis point rate hike has risen to 12.4%. This is the highest level of market pricing in a rate hike since the end of this rate hike cycle. For the June meeting, the probability of a cumulative 25 basis point rate hike is 21.9%, the probability of a cumulative 50 basis point rate hike is 1.6%, and the probability of keeping rates unchanged is 76.5%. This indicates that market expectations for a rate hike this year are rapidly forming.
Iran sets out six conditions for ending the war.
According to Lebanon's Al-Ahram TV, a security official stated that Iran has outlined six strategic conditions for halting its defensive war against the United States and the Zionist regime. The official said the plan is to be implemented in phases, and a ceasefire is not expected anytime soon due to the evolving battlefield situation.
Iran's six conditions include: guaranteeing no further war; closing U.S. military bases in the region; repelling aggression and paying reparations to Iran; ending the war on all regional fronts; implementing a new legal regime in the Strait of Hormuz; and prosecuting and extraditing anti-Iranian media figures.
Iran says it will allow non-enemy vessels to pass through the Strait of Hormuz
According to Iran's Mehr News Agency, Iran's representative to the International Maritime Organization (IMO) stated that Iran is prepared to cooperate with the IMO and other countries to enhance maritime security and protect seafarers. Except for enemy vessels, ships from all countries can pass through the Strait of Hormuz after coordinating safety and security arrangements. Attacks by the United States and Israel are the root cause of the current situation in the Strait of Hormuz. (CCTV)
Japan is considering sending troops to clear mines after a ceasefire in the Strait of Hormuz.
Japanese Foreign Minister Toshimitsu Motegi stated on Fuji Television that Japan might consider sending troops to the Strait of Hormuz for mine-clearing operations if the US and Israel reach a ceasefire in their war against Iran. Motegi said that Japan currently has no plans to seek passage for Japanese ships stranded in the strait, but creating conditions that allow all ships to pass safely through this narrow waterway is "extremely important." According to a previous report by Kyodo News, Iranian Foreign Minister Abbas Araqchi revealed that he had communicated with Motegi regarding the possibility of allowing ships associated with Japan to pass through the Strait of Hormuz.
Three major gas-fired power plants under Trump's threat to Iranian power plants
US President Trump threatened to "strike and destroy" Iran's power plants if Iran does not open the Strait of Hormuz within 48 hours, starting with "the biggest one." According to data from OpenInfraMap, an open-source energy infrastructure intelligence tool, Iran has approximately 110 gas-fired power plants, a few of which are hybrid plants. In addition, the country operates solar, hydroelectric, wind, oil, diesel, coal, geothermal, and nuclear power plants. By power generation, Iran's three main power plants are all gas-fired: the Damavand Combined Cycle Power Plant, located about 70 kilometers southeast of Tehran's city center, with an installed capacity of 2,868 MW; the Shahid Salimi Power Plant, located in Mazandaran Province near the Caspian Sea, with an installed capacity of 2,215 MW; and the Shahid Rajai Power Plant, located about 110 kilometers northeast of Tehran's city center, with an installed capacity of 2,043 MW.
Iran arrests 35 traitors in 9 provinces
The Islamic Republic of Iran's security forces issued a statement on the 22nd, local time, stating that, based on tips from the public, a coordinated operation resulted in the arrest of 35 traitors across nine provinces nationwide, and the seizure of weapons, ammunition, and equipment related to their activities. The statement indicated that these traitors attempted to carry out terrorist acts against Iranian security forces and the Iranian people by collecting and transmitting information from key Iranian centers to hostile foreign forces and intelligence agencies, but they were arrested before they could take action. The operation also cracked down on several traitor networks operating in cyberspace.
The U.S. State Department advises U.S. citizens around the world to be vigilant.
On March 22, local time, the U.S. State Department issued a warning, advising U.S. citizens around the world, especially those in the Middle East, to exercise caution. The warning stated that U.S. citizens abroad should follow the security alerts issued by the nearest U.S. embassy or consulate. Periodic airspace closures may cause travel disruptions. U.S. diplomatic facilities outside the Middle East have become targets of attacks. Various groups supporting Iran may target other U.S. interests abroad or locations around the world associated with the U.S. and its citizens. (CCTV)
US Treasury Secretary says military action against Iran will continue.
Following Trump's order for Tehran to open the Strait of Hormuz no later than Monday, US Treasury Secretary Bessant stated that the US-Israeli strikes against Iran aimed to destroy its defenses along the Strait of Hormuz. Bessant said on Sunday that Trump would "take all necessary measures" to achieve the US's established goals, including destroying Iran's air force and navy, stripping it of its ability to possess nuclear weapons, and "its ability to project power internationally." "Even if there's a temporary price spike for 50 days," Bessant said, "trading 50 days for not facing a nuclear-armed Iran for the next 50 years, after which prices will naturally fall." When asked about the timeline for the price drop, he said, "I don't know if it's 50 days later, or 100 days later."
Ministry of Finance: Will appropriately increase the proportion of public service expenditures in fiscal expenditures
At the China Development Forum 2026 held today, Finance Minister Lan Fo'an stated that over the next five years, investment in people's livelihoods will be increased, and the proportion of public service expenditures in total fiscal expenditure will be appropriately raised. Lan Fo'an stated that during the 14th Five-Year Plan period, my country's fiscal investment in people's livelihoods approached 100 trillion yuan, accounting for over 70% of total fiscal expenditure, promoting the construction of the world's largest education system, social security system, and healthcare system. In the next five years, the proportion of government investment in livelihood-related areas will be increased, expanding development space while meeting people's needs. (CCTV News)
China's large AI model has a weekly usage volume of 4.69 trillion tokens.
According to the latest data released by OpenRouter, the world's largest AI model API aggregation platform, as of March 15, the weekly call volume of Chinese AI large-scale models reached 4.69 trillion tokens, surpassing the United States for the second consecutive week. Chinese models occupy the top three positions globally in terms of call volume. JPMorgan Chase predicts that China's AI inference token consumption will grow from approximately 10 quadrillion in 2025 to approximately 390 quadrillion in 2030, an increase of approximately 370 times in five years. (CCTV Finance)
stock market
U.S. stocks plunged on Friday, with the S&P 500 closing down 1.51% at 6,506.48, its lowest level in six months; the Nasdaq fell 2.01%, and the Dow Jones Industrial Average dropped 0.96%. All three major indexes recorded their fourth consecutive weekly decline, falling below their 200-day moving averages, due to the ongoing conflict in the Middle East and escalating inflation concerns. As the war between the U.S.-Israeli coalition and Iran entered its fourth week, market expectations for a prolonged conflict and a possible interest rate hike by the Federal Reserve intensified.
The energy sector rose for the 13th consecutive week, driven by geopolitical events, while utilities and real estate led the declines. Trading volume surged significantly on the day, coinciding with a "Triple Witch" spell.
In terms of individual stocks, tech giants such as Nvidia and Tesla fell by more than 3%, while the market also focused on the continued weakening of US Treasury bonds and the repricing of the possibility of interest rate hikes in the interest rate futures market.
Gold Market
Gold prices fell 1.8% on Friday, with spot gold closing at $4,563.64 per ounce. It had risen as much as 1% during the session, but turned lower due to a stronger dollar and higher U.S. Treasury yields.
Reports indicate that the U.S. military is sending thousands more Marines and sailors to the Middle East, exacerbating market concerns about rising oil prices, inflation, and the ensuing increase in interest rates.
Independent precious metals traders noted that precious metals prices fluctuated wildly last week due to concerns about interest rate hikes, with gold prices dragging down before the weekend. While gold is generally seen as a hedge against inflation and uncertainty, rising interest rates have diminished its appeal. The market also anticipates that the European Central Bank and the Bank of England may raise interest rates as early as April. Spot silver, platinum, and palladium also recorded declines last week.
oil market
International oil prices surged on Friday, with Brent crude futures settling at their highest level since July 2022. May Brent crude futures closed up 3.26% at $112.19 per barrel, and rose approximately 8.8% last week, influenced by the continued escalation of tensions in the Middle East.
Iraq declared force majeure on all oil fields developed by foreign oil companies, while the US deployed thousands more Marines and sailors to the Middle East, further escalating the situation with Iran. Analysts point out that expectations of prolonged disruptions to shipping through the Strait of Hormuz and supply shortages are keeping oil prices high.
The market is also focused on the unresolved conflict between the US and Israel over Iran, the attack on Iran's energy infrastructure, and the subsequent strikes against neighboring countries, which have further exacerbated supply concerns.
US President Trump posted on social media on the 21st that if Iran does not fully open the Strait of Hormuz without any threats within 48 hours, the United States will strike and destroy all of its power plants.
Foreign exchange market
The dollar rose on Friday but is still on track for a weekly decline against major currencies. Investors reduced their bets on a Federal Reserve rate cut as rising energy prices pushed up inflation.
Since the start of the US-Israel war against Iran, Brent crude futures have risen by about 50%, with the market widely believing that the Federal Reserve's prospects for interest rate cuts this year are slim, while other major central banks are shifting towards a more hawkish stance. The euro, yen, pound, and Swiss franc all recorded weekly gains against the dollar.
The dollar index rose about 0.26% to 99.59, but still fell 0.94% last week, its biggest weekly drop since late January. The European Central Bank and the Bank of England both warned of inflationary pressures, the Bank of Japan left room for a rate hike as early as April, and the Reserve Bank of Australia raised rates for the second consecutive month.
International News
The probability of the Federal Reserve keeping interest rates unchanged in April has fallen to 87.6%, while expectations of a rate hike continue to rise.
According to the latest data from CME's "FedWatch," the market expects an 87.6% probability that the Federal Reserve will keep interest rates unchanged at its April meeting, while the probability of a 25 basis point rate hike has risen to 12.4%. This is the highest level of market pricing in a rate hike since the end of this rate hike cycle. For the June meeting, the probability of a cumulative 25 basis point rate hike is 21.9%, the probability of a cumulative 50 basis point rate hike is 1.6%, and the probability of keeping rates unchanged is 76.5%. This indicates that market expectations for a rate hike this year are rapidly forming.
Iran sets out six conditions for ending the war.
According to Lebanon's Al-Ahram TV, a security official stated that Iran has outlined six strategic conditions for halting its defensive war against the United States and the Zionist regime. The official said the plan is to be implemented in phases, and a ceasefire is not expected anytime soon due to the evolving battlefield situation.
Iran's six conditions include: guaranteeing no further war; closing U.S. military bases in the region; repelling aggression and paying reparations to Iran; ending the war on all regional fronts; implementing a new legal regime in the Strait of Hormuz; and prosecuting and extraditing anti-Iranian media figures.
Iran says it will allow non-enemy vessels to pass through the Strait of Hormuz
According to Iran's Mehr News Agency, Iran's representative to the International Maritime Organization (IMO) stated that Iran is prepared to cooperate with the IMO and other countries to enhance maritime security and protect seafarers. Except for enemy vessels, ships from all countries can pass through the Strait of Hormuz after coordinating safety and security arrangements. Attacks by the United States and Israel are the root cause of the current situation in the Strait of Hormuz. (CCTV)
Japan is considering sending troops to clear mines after a ceasefire in the Strait of Hormuz.
Japanese Foreign Minister Toshimitsu Motegi stated on Fuji Television that Japan might consider sending troops to the Strait of Hormuz for mine-clearing operations if the US and Israel reach a ceasefire in their war against Iran. Motegi said that Japan currently has no plans to seek passage for Japanese ships stranded in the strait, but creating conditions that allow all ships to pass safely through this narrow waterway is "extremely important." According to a previous report by Kyodo News, Iranian Foreign Minister Abbas Araqchi revealed that he had communicated with Motegi regarding the possibility of allowing ships associated with Japan to pass through the Strait of Hormuz.
Three major gas-fired power plants under Trump's threat to Iranian power plants
US President Trump threatened to "strike and destroy" Iran's power plants if Iran does not open the Strait of Hormuz within 48 hours, starting with "the biggest one." According to data from OpenInfraMap, an open-source energy infrastructure intelligence tool, Iran has approximately 110 gas-fired power plants, a few of which are hybrid plants. In addition, the country operates solar, hydroelectric, wind, oil, diesel, coal, geothermal, and nuclear power plants. By power generation, Iran's three main power plants are all gas-fired: the Damavand Combined Cycle Power Plant, located about 70 kilometers southeast of Tehran's city center, with an installed capacity of 2,868 MW; the Shahid Salimi Power Plant, located in Mazandaran Province near the Caspian Sea, with an installed capacity of 2,215 MW; and the Shahid Rajai Power Plant, located about 110 kilometers northeast of Tehran's city center, with an installed capacity of 2,043 MW.
Iran arrests 35 traitors in 9 provinces
The Islamic Republic of Iran's security forces issued a statement on the 22nd, local time, stating that, based on tips from the public, a coordinated operation resulted in the arrest of 35 traitors across nine provinces nationwide, and the seizure of weapons, ammunition, and equipment related to their activities. The statement indicated that these traitors attempted to carry out terrorist acts against Iranian security forces and the Iranian people by collecting and transmitting information from key Iranian centers to hostile foreign forces and intelligence agencies, but they were arrested before they could take action. The operation also cracked down on several traitor networks operating in cyberspace.
The U.S. State Department advises U.S. citizens around the world to be vigilant.
On March 22, local time, the U.S. State Department issued a warning, advising U.S. citizens around the world, especially those in the Middle East, to exercise caution. The warning stated that U.S. citizens abroad should follow the security alerts issued by the nearest U.S. embassy or consulate. Periodic airspace closures may cause travel disruptions. U.S. diplomatic facilities outside the Middle East have become targets of attacks. Various groups supporting Iran may target other U.S. interests abroad or locations around the world associated with the U.S. and its citizens. (CCTV)
US Treasury Secretary says military action against Iran will continue.
Following Trump's order for Tehran to open the Strait of Hormuz no later than Monday, US Treasury Secretary Bessant stated that the US-Israeli strikes against Iran aimed to destroy its defenses along the Strait of Hormuz. Bessant said on Sunday that Trump would "take all necessary measures" to achieve the US's established goals, including destroying Iran's air force and navy, stripping it of its ability to possess nuclear weapons, and "its ability to project power internationally." "Even if there's a temporary price spike for 50 days," Bessant said, "trading 50 days for not facing a nuclear-armed Iran for the next 50 years, after which prices will naturally fall." When asked about the timeline for the price drop, he said, "I don't know if it's 50 days later, or 100 days later."
Domestic News
Ministry of Finance: Will appropriately increase the proportion of public service expenditures in fiscal expenditures
At the China Development Forum 2026 held today, Finance Minister Lan Fo'an stated that over the next five years, investment in people's livelihoods will be increased, and the proportion of public service expenditures in total fiscal expenditure will be appropriately raised. Lan Fo'an stated that during the 14th Five-Year Plan period, my country's fiscal investment in people's livelihoods approached 100 trillion yuan, accounting for over 70% of total fiscal expenditure, promoting the construction of the world's largest education system, social security system, and healthcare system. In the next five years, the proportion of government investment in livelihood-related areas will be increased, expanding development space while meeting people's needs. (CCTV News)
China's large AI model has a weekly usage volume of 4.69 trillion tokens.
According to the latest data released by OpenRouter, the world's largest AI model API aggregation platform, as of March 15, the weekly call volume of Chinese AI large-scale models reached 4.69 trillion tokens, surpassing the United States for the second consecutive week. Chinese models occupy the top three positions globally in terms of call volume. JPMorgan Chase predicts that China's AI inference token consumption will grow from approximately 10 quadrillion in 2025 to approximately 390 quadrillion in 2030, an increase of approximately 370 times in five years. (CCTV Finance)
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
