Finance

First-quarter gross domestic product (GDP) grew at an annualized rate of 2%, reflecting resilience despite the economic shocks from the ongoing war with Iran. Growth was largely sustained by a rebound in government spending and continued private investment in artificial intelligence, which helped counteract a noticeable slowdown in consumer spending due to rising energy costs.

Energy markets saw heavy volatility as Brent crude reached highs of $114 per barrel before slightly moderating, driven by fears of an extended blockade in the Strait of Hormuz. Simultaneously, gold prices climbed to over $4,640 an ounce as investors sought safe-haven assets in response to both geopolitical uncertainty and persistent inflationary pressures.

The Federal Open Market Committee recently held the federal funds rate steady in a target range of 3.5% to 3.75%. However, the central bank adopted a more hawkish tone, leading market participants to reduce expectations for future rate cuts and even begin pricing in the possibility of subsequent hikes if energy-driven inflation remains elevated.