Macroeconomics

On March 18, U.S. national debt surpassed $39 trillion, drawing market attention. Rising debt is driven by persistent deficits and increased interest burdens, with investors showing growing interest in decentralized assets such as Bitcoin. Policymakers face trade-offs between debt servicing and funding new initiatives, with rising debt potentially impacting infrastructure investment and long-term economic growth. Markets should monitor how debt developments influence investment strategies.

The Federal Reserve will maintain interest rates at 3.5%-3.75% on March 18. Market attention will be on Powell's comments regarding inflation and future policy. Rising core PCE and oil price pressures limit the room for rate cuts, with only a 30% chance of easing this year. Political factors influencing Powell's tenure have led to noticeable market reactions, and risk assets as well as cryptocurrency prices are expected to be affected.

Daniel Ravnetti, Head of Fixed Income at Mediolanum International Fund Management, stated that the market has already priced in the Federal Reserve maintaining interest rates unchanged at the meeting. Recent economic data indicates slowing inflation and a deteriorating labor market. The Federal Reserve is expected to communicate a cautious stance, potentially mentioning war risks and increasing two-sided language.

John Tener of Aptus Capital Advisors noted that the upcoming Federal Reserve meeting will take place against the backdrop of Middle East conflicts and rising oil prices. The market is focused on the dot plot and Powell's language. Rate cut expectations have been canceled, but could quickly resume if the conflict ends.

Bitcoin recently touched $75,000 but failed to sustain the level, pulling back to $74,000, reflecting cautious sentiment among investors ahead of the upcoming Federal Reserve interest rate decision. Geopolitical risks and elevated energy prices have driven inflation higher, affecting market expectations for rate cuts and pushing the timeline for cuts to year-end. Technical analysis shows Bitcoin remains strong but has not confirmed a decisive breakout above the $75,000 level, with limited upside potential in the near term.

On March 18, Alibaba Cloud announced price increases of up to 34% for its AI computing power and storage products due to the global explosion in AI demand and supply chain price increases. Computing cards and file storage products also saw significant price increases. This round of price increases is primarily driven by the surge in Token call volume, with Alibaba Cloud prioritizing AI computing power demand for Token business.

Iran conflict leads to Strait of Hormuz blockade, impacting global fertilizer supply chains and other markets. Urea prices have surged to $601, affecting agricultural production costs. Meanwhile, WTI crude oil approaches $90, and Bitcoin has also risen due to safe-haven demand, demonstrating market interconnectedness. The urea price increase is primarily driven by its production dependence on natural gas, with the blockade directly affecting transportation routes.

Recent reasons for Bitcoin's decline include geopolitical conflict uncertainty triggered by the death of Iranian wartime official Larijani, the blockade of the Strait of Hormuz pushing oil prices above $100, exacerbating inflation pressures and reducing Federal Reserve rate cut expectations, as well as institutional capital withdrawal. On the technical side, $72,000 is an important support level, and a break below could lead to further exploration toward $64,000.

The U.S. Securities and Exchange Commission (SEC) Chair has proposed adjusting information disclosure frequency based on company size. The agency is currently evaluating modifications to financial reporting requirements, with plans to change quarterly disclosures to semi-annual reporting to save time and costs. The proposal must first be submitted to the White House for review.

Gate News reports that on March 17, the U.S. Automatic Data Processing Company (ADP) released its weekly employment report showing that over the four-week period ending February 28, 2026, private sector employers added an average of 9,000 jobs per week.

Cathie Wood stated that artificial intelligence has improved labor productivity and will significantly boost growth to 6% annually over the next decade. The application of large language models has surprised many skeptics, with frontier AI companies like Anthropic and OpenAI experiencing significant revenue growth, with projected future revenues expected to reach 10 trillion to 12 trillion dollars, creating a major impact on GDP.

On March 17, a short-term interest rate options trade betting on the Federal Reserve maintaining higher rates for an extended period closed for a profit of approximately $10 million, exiting ahead of the Federal Reserve's policy meeting. The core thesis of the trade predicted that U.S. interest rates in 2028 would be higher than market expectations. Driven by inflation concerns, the market has downward-revised its expectations for rate cuts.

A Bank of America survey on March 17 shows that investor sentiment is pessimistic, affected by the Iran war and concerns about private credit, with the expected proportion of strong global economic growth plummeting to 7%. Despite the decline in sentiment indicators, it remains higher than the low point in April 2025.

Moody's economists warn that a blockade of the Strait of Hormuz would worsen the U.S. economic outlook, making recession difficult to avoid. The current recession probability has reached as high as 49% and is expected to exceed 50%. Unlike the past, the U.S. economy lacks post-pandemic stimulus support, employment data is weak, and future growth may be only 0.7%.

Trump is calling for the Federal Reserve to immediately convene a special meeting to cut rates, emphasizing that now is the time for action and noting that lower interest rates would help reduce national debt servicing costs and stimulate the economy. Despite his pressure, market expectations for this rate cut remain low, as the Federal Reserve faces challenges from inflation and rising oil prices and may not quickly adjust policy. The crypto market has already priced in expectations of no rate cut, with focus shifting to the Federal Reserve's future policy direction.

As artificial intelligence intensifies its impact on software revenue, the private credit market faces mounting pressure with default rates climbing to 5.8%. Analysts warn that additional monetary expansion may be necessary, while Bitcoin has emerged as a hedging tool for investors, with its appeal growing amid uncertainty. The market needs to monitor developments in private credit dynamics and the impact of policy adjustments on Bitcoin's price.

Gate News reported that on March 17, the U.S. Department of the Treasury will execute a $15 billion Treasury buyback (the government repurchasing bonds it has issued to regulate market liquidity), surpassing last week's $14.7 billion and becoming the largest Treasury buyback program in history.

The US SEC plans to abolish the requirement for listed companies to publish quarterly financial reports, replacing it with two reports per year, expected to be implemented in April 2026. This measure may lower compliance costs for companies but has also sparked controversy, as it could increase information asymmetry and market volatility, affecting stock and digital asset markets.

Trump renews calls for Fed rate cuts and convenes "special meeting," drawing market attention. Against a backdrop of diverging inflation and employment data, the Federal Reserve faces policy trade-offs. Geopolitical risks push energy prices higher, affecting future rate decisions. Markets await policy guidance following the Fed meeting.

The crypto market is experiencing gains amid rising diesel and gasoline prices in the US. BTC and ETH lead this upward trend, while gold and silver also see increases. However, market volatility persists due to inflation concerns and geopolitical factors.