New York, New York
— March 13, 2026
Macro Factors Are Moving Markets Right Now
Recession odds are climbing on prediction markets. Oil is back near the $100 mark. The Dow is off its famous 50,000 high. Macro is back.
Here’s the clean breakdown of the forces driving the move right now, and why it suddenly feels harder to navigate than it did a few months ago.
Inflation: “steady” on paper, but the next prints matter more
The most recent inflation data looked relatively stable, but it’s important to understand what that data represents.
- CPI held at 2.4% YoY in February.
- Core PCE (the Fed’s preferred measure) ran 3.1% YoY in January.
So yes, inflation looked mostly steady in January and February. But those numbers are largely pre-shock.
If oil and gasoline stay elevated, the real question becomes: how much of that cost filters into the economy with a lag? So yeah, talk to us in a month or two when we get the next prints…
Growth: GDP just got revised down
Q4 GDP was already below expectations and then it was revised down further. It’s notable because it’s telling you growth was already losing momentum before the newest headline risks.
- The U.S. economy was revised to 0.7% annualized growth in Q4 2025.
- Multiple reports noted the government shutdown as a distortion factor in the data so that should help it even out over time.
Call it a caveat, but here’s the point: when growth prints are already soft, the market becomes far more sensitive to anything that could push inflation up or demand down. That’s the stagflation fear that its starting to becoming increasingly likely this year.
Sentiment: consumers are wobbling and investors are spooked
If you want to understand what markets are feeling, follow sentiment. Right now, it’s turning.
Consumers
The University of Michigan consumer sentiment index slipped in early March by 2%. However only about half of the responses were collected before the Iran-related escalation and increased gas prices. Sentiment has most likely weakened even further since.
Investors
Two sentiment gauges are flashing:
- AAII bearish sentiment jumped about 11 percentage points to 46.4% in the latest weekly survey.
- CNN’s Fear & Greed Index recently registered “extreme fear” in coverage of the latest volatility spike for the first time this year.
When you see that combo (bearish sentiment surge + extreme fear), it often means positioning is getting washed out. Sometimes that sets up opportunity. Sometimes it’s just the early phase of a longer drawdown.
Which brings us to the next indicator.
“Recession odds” are rising in real time
One of the most telling changes this week is that recession probabilities have been creeping up on prediction markets like Kalshi and Polymarket. Axios, for example, cited recession odds rising materially as oil spiked, including moves from the mid-20s to the high-30s in a short window.
You don’t have to treat these markets as gospel. But they do function as a live barometer of fear, and right now that barometer is rising.
Two extra headwinds worth watching
Outside the main macro stack (inflation, growth, sentiment), two themes keep coming up in the background:
- Private credit stress: if valuation marks reset and refinancing windows close, it can create a slower-moving “credit grind” that hits risk appetite over time.
- AI-backed layoffs: companies are getting more aggressive about productivity and headcount, and that can show up in jobs data and consumer spending if it accelerates without the labor market updating their skills or starting new businesses.
Bottom line
Right now, it’s not one thing. It’s everything at once.
- Inflation is not solved, and energy can re-light it.
- Growth is softer than it looked, and revisions are reinforcing that.
- Sentiment is deteriorating across consumers and investors.
- Recession odds are moving up in real time.
So the big question, as always: will dip buyers be rewarded again?
More to come. Be good.
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