March 19 Member Morning Brief: Inflation Exceeds Expectations, Fed Hawks, Conflict Escalates as Iran Strikes Oil

【U.S. Inflation Surges Beyond Expectations】The U.S. Department of Labor released data on Wednesday showing that in February, the Producer Price Index (PPI) increased by 3.4% year-over-year, surpassing market expectations of 3.0% and significantly accelerating from the previous 2.9%. Month-over-month, it rose by 0.7%, the largest single-month increase since July 2025, well above the expected 0.3%, with the previous month at 0.5%.

【Federal Reserve Turns Hawkish】Federal Reserve Chair Jerome Powell stated that if there is no evidence of progress in inflation, interest rate cuts will not occur. He confirmed he will not resign during the investigation period. If his successor is not confirmed by the Senate, he will continue to serve as acting chair until the end of his term.

【Conflict Escalates Again】After a major domestic gas field was attacked by Israel, Iran announced it would intensify attacks on U.S.-related oil facilities and designated energy facilities in Saudi Arabia, the United Arab Emirates, and Qatar as legitimate targets. Emergency evacuations were initiated at the affected sites.

【Aluminum Prices Hit 4-Year High】Global aluminum supply faces severe disruptions. Aluminum prices on the London Metal Exchange have risen approximately 8% since February 28, approaching a four-year high of $3,370 per ton. Bahrain Aluminum, the world’s largest aluminum smelter, reduced production by 19%, heightening supply concerns.

【Micron’s Earnings Surpass Expectations】Micron’s second fiscal quarter gross margin approached 75%, with revenue and EPS reaching new quarterly highs; quarterly dividends increased by 30%. The third quarter revenue guidance median exceeded analyst expectations by over 50%, and EPS guidance was nearly 70% above expectations, with an estimated gross margin of 81%. Capital expenditure guidance for the current fiscal year was raised by 25% to $25 billion, with expected spending in the next fiscal year exceeding $10 billion more than this year.