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SFM Market Commentary: 3/13/26

In the last two weeks, the U.S. labor market showed unexpected weakness with a significant drop in payrolls and a rise in unemployment, prompting discussions of potential interest rate cuts by the Federal Reserve. Concurrently, geopolitical tensions have escalated in the Middle East, with expanding conflict involving Iran and concerns over global shipping routes through the Strait of Hormuz. Let’s dive in!

  • February Job Decline: U.S. nonfarm payrolls fell by 92,000, missing the 50,000 gain estimate and continuing a trend of weaker-than-expected job growth. The unemployment rate rose to 4.4%, while wages increased slightly above forecasts, reflecting persistent labor market challenges.
  • Middle East Conflict: Israeli and U.S. launched airstrikes targeting Iran, killing its Supreme Leader, while Iran and regional allies retaliated with attacks on Israel and Gulf states including Saudi Arabia, Qatar, and the UAE. The conflict has escalated energy disruptions and regional security concerns, with no clear end in sight.
  • Strait of Hormuz Closure: Shipping companies have suspended all vessel crossings through the Strait of Hormuz, forced by regional conflict and attacks, rerouting shipments around Africa. This disruption risks raising global energy prices and shipping costs due to the strait’s critical role in oil and container trade.
  • Fed Rate Outlook: Federal Reserve Governor Stephen Miran suggests the weak February jobs report supports further interest rate cuts, advocating for a near-neutral rate to better support the labor market while downplaying current inflation concerns as mostly measurement-related.
  • Housing Supply Deficit: The U.S. housing supply gap widened to 4.03 million homes in 2025, driven by increased household formation and decreased housing construction, continuing a decade-long trend of underbuilding that pressures prices and affordability.
  • Mortgage Rate Trends: Average 30-year fixed mortgage rates peaked at 16.64% in 1981 and hit a low of 3.15% in 2021. As of February 2026, the average rate stands at 6.10%, reflecting recent Federal Reserve policy shifts and economic conditions.
  • IMF Middle East Outlook: The economic impact of the Middle East conflict depends on its duration and effects on infrastructure and energy prices. Persistent energy shocks could prompt central banks to act cautiously amid inflation and growth concerns, while temporary price rises may be monitored without immediate policy changes.
  • Tax Refund Increase: The average individual tax refund is 10.6% higher than last year, with an average refund amount for individual filers of $3,742. Changes from the 2025 tax law, including new deductions and credits, are contributing to larger refunds for many filers so far.
  • Federal Workforce Shrinks: The U.S. government’s civilian workforce decreased by 12% from September 2024 to January 2026, driven by voluntary exits and retirements under Trump’s government downsizing efforts. Agencies like the Treasury Department and Health and Human Services saw steep cuts, while Homeland Security grew slightly.


Over the next two weeks, markets will closely monitor upcoming economic data, particularly the Consumer Price Index and trends in energy prices. Developments in the Middle East and the upcoming Federal Reserve meeting, where policymakers will determine interest rate policy, may also influence broader market sentiment.

Footnotes