Secure client login

CIO Macro Trends: The Refund Ran Out Before the Gas Bill Did

ekiser on April 28, 2026

March retail sales beat expectations, consumer sentiment found a floor (even if the floor is a 75-year low) and pending home sales surprised to the upside. Read the fine print, though, and the picture is less encouraging. A blockbuster tax refund season carried the consumer through the first quarter, but that windfall has nearly run its course, and gasoline prices north of $4 a gallon are not going anywhere soon. 

Executive Summary 

  • Retail sales rose 1.7% in March, beating consensus forecast, with control group sales up 0.7%. Income tax refunds surged 22.4% year-over-year in March, driving much of the upside. It is estimated that more than 80% of expected refunds have already been distributed. 
  • The final April release from the University of Michigan revised the consumer sentiment index to 49.8 from the preliminary 47.6, still the lowest reading in the survey’s nearly 75-year history. Year-ahead inflation expectations settled at 4.7%, confirming the largest one-month jump since April 2025. 
  • First quarter real consumer spending now tracks roughly 1% annualized, above the prior 0.7% baseline, but growth may fall in the second quarter as the refund tailwind fades. 
  • Pending home sales surprised to the upside in March, rising 1.5%, but the increase does not likely signal the start of a trend. Business inventories broke a three-month stretch of no growth, rising 0.4% in February. 
  • Initial jobless claims rose to 214,000; seasonal noise, not deterioration, drove the increase. 
  • The Federal Reserve will almost certainly hold rates steady at next week’s Federal Open Market Committee (FOMC) meeting, which now looks likely to be Jerome Powell’s last as chair. Rate cuts will probably arrive later than previously assumed, as inflation is likely to stay elevated longer than anticipated, due largely to the artificial intelligence (AI) buildout. 
  • AI-driven layoffs are accelerating in the technology sector, with an estimated 10,000 job cuts announced through mid-April, and the information sector layoff rate has diverged sharply from the overall private sector. 

The Consumer Spent the Windfall. Now What? 
The March retail sales report delivered a headline that looked better than it was. Sales rose 1.7%, beating the consensus forecast, but gas station receipts accounted for much of the jump as pump prices surged in the wake of the war. More telling was the 0.7% gain in control group sales, the subset that feeds directly into the broader Personal Consumption Expenditures (PCE) measure, which came in well above consensus.  

The strength owed much to a 22.4% year-over-year surge in income tax refunds issued during March, with middle- and upper-income households filing later and reaping the retroactive provisions of the One Big Beautiful Bill Act (OBBBA). That windfall is nearly spent. It is estimated that more than 80% of expected refunds have already been distributed, with only $40 to $45 billion more to flow by the end of May.  

First quarter real consumer spending now tracks roughly 1% annualized, an improvement from the prior 0.7% baseline, but growth might very well fall below 1% in the second quarter as the refund boost fades and the drag from high gasoline prices continues to build.  

  • Key Takeaway: The consumer made it through Q1 on borrowed time and borrowed money. With the refund check cashed and gasoline still north of $4 a gallon, Q2 will test whether the labor market alone can keep spending afloat. 

Record-Low Sentiment, Record-High Expectations 
The ceasefire and the equity market rebound that it triggered managed to lift consumer sentiment from the abyss, but not by much. The final April release from the University of Michigan revised the consumer sentiment index to 49.8 from the preliminary 47.6, still the lowest in the survey’s nearly 75-year history.  

Gas prices stabilized in the second half of April and stocks rallied, easing some of the anxiety among low-income consumers who are most sensitive to pump prices. Year-ahead inflation expectations settled at 4.7%, confirming the largest single-month increase since April 2025, driven by average gas prices exceeding $4 per gallon throughout the month.  

Long-run inflation expectations rose to 3.5% from 3.2%, a move that bears watching given the Federal Reserve’s sensitivity to this anchor. The hit to real disposable income from higher gas prices is likely to slow consumption growth to around 2% this year, down from 2.6% in 2025, with low- and middle-income households absorbing the heaviest blow as a larger share of their spending goes toward gasoline. 

  • Key Takeaway: A 2-point upward revision from the preliminary reading offers cold comfort when the revised number still sets a 75-year low. The gap between sentiment and spending has widened, but real income erosion from gasoline will eventually close it from the wrong direction. 

Housing and Inventories: Treading Water, Awaiting a Thaw 
Pending home sales surprised to the upside in March, rising 1.5% against flat forecasts, with gains in the Northeast and South offset by declines in the Midwest and West. The increase points to a modest improvement in existing home sales in April, but we do not view it as the beginning of an upward trend. With mortgage rates elevated and consumer confidence depressed, we expect sales to move sideways until later in the year, when declining oil prices should bring mortgage rates down with them.  

On the inventory side, business stockpiles broke a three-month stretch of no growth, rising 0.4% in February. Oxford Economics still estimates that stockbuilding dragged first quarter gross domestic product (GDP) by 0.4 percentage points, but expects inventory investment to swing into a positive contribution over the remainder of the year as restocking gains momentum. Inventories have become leaner in recent quarters, and business surveys corroborate the picture, with manufacturers increasingly reporting that customer inventories are too low. 

  • Key Takeaway: Housing will remain frozen until mortgage rates thaw. The better news sits on the inventory side, where lean stockpiles and improving lending conditions set the stage for a restocking cycle that should support growth in the second half. 

The Fed at a Crossroads: Later Cuts, a New Chair and the AI Wildcard 
The Federal Reserve will almost certainly hold rates steady at this week’s FOMC meeting, and the focus will fall squarely on any signal about the future path of policy. It is likely that any rate cuts will arrive later than prior June and September assumptions. The shift reflects two developments: more stable conditions in the Middle East have slightly reduced the downside risks to the labor market, and inflation is likely to stay higher for longer, due largely to the AI buildout that continues to drive up prices for electronics, capital goods and related services.  

This week’s meeting now looks almost certain to be Powell’s last as Chair, after the Department of Justice announced it would drop its investigation. That should clear the way for Kevin Warsh’s confirmation. Warsh articulated familiar views at his Senate hearing: he believes AI-driven productivity gains will allow for more economic growth without stoking inflation, he favors slashing the Federal Reserve’s balance sheet and he prefers less public communication from the central bank. The bigger question for Federal Reserve independence is whether Powell will resign from the board entirely; his term as governor runs through January 2028, and he has indicated he will not leave until the investigation concludes with “transparency and finality.” 

  • Key Takeaway: The Federal Reserve’s next move will be shaped less by oil prices and more by how persistent AI-driven inflation proves to be. If Warsh brings the conviction about AI productivity he expressed at his hearing, the central bank’s reaction function could shift in ways markets have not yet priced. 

The Labor Market: Still Standing, But AI Is Thinning the Ranks 
Initial claims for jobless benefits rose 6,000 to 214,000 in the week ended April 18, above the 210,000 consensus; however, seasonal adjustment noise rather than deterioration in labor market conditions drove the increase. On an unadjusted basis, claims continue to track below year-ago levels. Continued claims rose 12,000 to 1.821 million, though the pattern of downward revisions persists and the four-week moving average ticked up only slightly. The broader claims picture shows no evidence of war-related damage to the labor market, though it is likely the spillover from higher oil prices will arrive with a lag.  

One emerging fault line deserves attention: AI-driven layoffs in the technology sector. Tech firms announced an estimated 10,000 job cuts through mid-April, with several companies explicitly tying the reductions to investment in AI. The layoff rate in the information sector has risen sharply since late 2025, even as the overall private sector rate has held steady, making it one of the first tangible signs that AI adoption is reshaping the labor market from the inside out. 

  • Key Takeaway: The labor market is stable in aggregate, but the AI layoff signal in the information sector is worth heeding. If technology is the leading edge of a broader reallocation, the transition will create pockets of pain even as the macro numbers hold. 

Final Thoughts 
This week brings the FOMC meeting, first quarter GDP, the PCE inflation report and quite possibly the final Powell press conference. It is a consequential stretch. GDP is likely to rebound above 2% annualized in the first quarter, driven by a sharp reversal of the government shutdown drag, with consumer spending moderate and business equipment investment strong on the back of the AI buildout.  

The consumer made it through Q1 on refund fumes and pre-war momentum, both of which are fading. The second quarter will be weaker, and the Federal Reserve seems to know it, which keeps rate cuts on the table this year even if they arrive later than previously expected. Markets have begun to price in a few more basis points of rate relief following the Warsh news, but they may very well be too conservative on the timing and magnitude of cuts. The Warsh confirmation adds a chairman who believes in AI-driven productivity and smaller balance sheets; the implications for monetary policy will unfold gradually rather than through any sudden pivot. The deeper question facing the economy is whether the AI buildout that is keeping inflation elevated is also generating enough productivity gains to support growth on the other side of the energy shock.  

The refund tailwind is spent. Gasoline prices remain high. And the labor market, while stable in aggregate, is beginning to sort winners from losers as AI adoption accelerates. The economy’s underlying growth potential remains north of 2%, driven by productivity. But the transition will be uneven, and the second quarter will test how much of Q1’s resilience was real and how much was borrowed. 

Oxford Financial Group, Ltd. is a SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The information provided is for general informational purposes only and should not be considered investment, tax, or legal advice. Opinions are those of the author and are subject to change based on market, regulatory or economic conditions. Forward-looking statements are opinions and/or estimates and are not guarantees of future results. Data and opinions are based on sources believed to be reliable, including unaffiliated third parties such as Oxford Economics, but their accuracy cannot be guaranteed. Past performance is not indicative of future results. See important disclosures and disclaimers at https://ofgltd.com/home/disclaimers. OFG-2604-45

CIO Macro Trends: Open Straits, Open Questions: Peace Takes Shape While the Scars Set In

ekiser on April 21, 2026

Iran reopened the Strait of Hormuz this week (only to close it again the next day), crude oil futures dropped toward $80 a barrel and the S&P 500 touched a record high. The data, however, told a different story — one of an economy still absorbing the hit from a war whose effects will linger long after the last ceasefire provision is signed.

Executive Summary

  • Iran declared the Strait of Hormuz fully open to commercial traffic then reimposed “strict control” the next day, crude oil futures fell near $80 per barrel and the S&P 500 reached an all-time high. The Geopolitical Risk Index (GRI) jumped two standard deviations in the first quarter, however, and the drag on business investment and hiring will likely peak two to three quarters from now.

  • The Producer Price Index (PPI) climbed to 4.0% year-over-year, its highest reading since February 2023, even as core producer prices rose a mere 0.1% month-over-month. Artificial intelligence (AI) demand has driven electronics components prices 19% higher year-over-year, fueled by a shortage of Dynamic Random-Access Memory (DRAM) semiconductor chips.

  • Oxford Economics Personal Consumption Expenditures (PCE) tracking nowcast points to headline inflation of 3.4% year-over-year, the hottest reading since September 2023.

  • The National Federation of Independent Business (NFIB) optimism index tumbled to its lowest level since “liberation day,” and plans to raise selling prices dropped to their lowest point since mid-2024.

  • The Federal Reserve’s Beige Book showed the economy holding steady, with the in-house Beige Book Activity Index (BBAI) improving to 0.48, well clear of recession territory, even as businesses cited the war as the dominant source of uncertainty.

  • The National Association of Home Builders (NAHB) Housing Market Index fell to 34, its lowest since September, while existing home sales slipped 3.6% to a seasonally adjusted annual rate (SAAR) of 3.98 million.

  • Industrial production fell 0.5%, driven by declines in mining and utilities rather than manufacturing. Initial jobless claims dropped to 207,000, and the labor market shows no sign of deterioration from the war.

The Ceasefire Turns Real — But the Damage Clock Is Ticking
The two-week ceasefire between the United States and Iran expires on April 22, but momentum toward a lasting agreement accelerated this week. President Donald Trump announced a separate ceasefire between Israel and Lebanon, directly linked to the broader peace framework and Iran declared the Strait of Hormuz fully open to commercial traffic but then did an about face on Saturday morning reimposing “strict control” of the waterway.

Markets responded emphatically: crude oil futures dropped near $80 per barrel and the S&P 500 reached an all-time high. The retreat in energy prices and the recovery in equities remove two of the biggest near-term drags on the outlook, the real income squeeze from gasoline and the negative wealth effect on upper-income spending that a deeper selloff would have triggered. But the damage from elevated geopolitical risk will not heal on the ceasefire’s timeline. Federal Reserve research shows the peak drag from a geopolitical shock on business investment (roughly 1.2%) and private weekly hours worked (approximately 0.6%) arrives two to three quarters after the event, meaning the worst of the economic impact from the first quarter’s volatility still lies ahead.

  • Key Takeaway: The ceasefire rewrites the risk distribution, not the damage function. Businesses that froze hiring and investment plans during the conflict will not unfreeze them the moment diplomats shake hands.

The Inflation Pipeline — From Producer to Consumer
The March PPI climbed 0.5% month-over-month, lifting the annual rate to 4.0%, its highest since February 2023. Energy prices surged 8.5% and diesel fuel costs spiking an extraordinary 42%. Core producer prices told a different story, rising a mere 0.1% as the annual rate actually ticked down to 3.7% from 3.8%. The stubborn outlier remains electronics: AI demand has created a shortage of DRAM semiconductor chips, driving components prices 19% higher year-over-year and damage to Middle Eastern natural gas and helium production facilities threatens to tighten supply further.

Import prices showed similar broadening, rising 2.1% year-over-year, the strongest gain since December 2024, with nonfuel imports driving the bulk of the monthly increase and signs emerging that foreign exporters have stopped cutting prices to absorb tariff impacts. With both the Consumer Price Index (CPI) and PPI data now in hand, our PCE tracking nowcast points to headline inflation of 3.4% year-over-year, the hottest since September 2023, with headline PCE expected to average 3.7% in the second quarter before easing to 3.0% by year-end.

  • Key Takeaway: The energy shock dominates the headlines, but core inflation and the producer pricing pipeline are not flashing the kind of alarm that would force the Federal Reserve to choose between its mandates.

Small Business Under Siege, Big Picture Holding
The NFIB Small Business Optimism Index fell to its lowest reading since “liberation day” in April 2025, with broad-based declines across capital expenditure plans, inventory intentions and the share of firms reporting positive earnings. Uncertainty surged to its highest point since September as owners struggled to gauge the future cost of energy and the war’s knock-on effects on demand. These firms absorbed the blow through thinner margins rather than higher prices. Plans to raise selling prices actually declined, dropping to their lowest level since mid-2024.

The Federal Reserve’s Beige Book painted a steadier picture at the macro level: the BBAI improved to 0.48 from 0.27, with eight of twelve Federal Reserve districts (67%) reporting growth, a reading well clear of recessionary territory. Yet beneath that surface stability, firms described a “no-hire, no-fire” labor market where AI-driven productivity gains are reducing the need for new headcount and input costs continue to outrun selling prices, squeezing margins further.

  • Key Takeaway: Small businesses are the canary for second-round inflation effects, and their decision to eat the cost rather than pass it on supports the view that core price pressures will remain contained, but their margins cannot absorb this indefinitely.

Housing — Frozen by Rates, Haunted by Inventory
The NAHB Housing Market Index dropped four points to 34 in April, below consensus, with the sharpest decline coming in the component measuring expectations for home sales six months from now. Builders cited declining consumer confidence, rising mortgage rates and higher material costs tied to oil prices as the primary culprits, and they pulled back on incentives to protect their margins. The share of homebuilders offering any form of buyer incentive fell to 60% from 64% in March.

The overhang of completed but unsold homes, which sat at 2009 levels in January, must shrink before any meaningful pickup in starts can materialize. On the resale side, existing home sales fell 3.6% in March to a SAAR of 3.98 million, with supply rising to 1.36 million units. This equates to 4.1 months at the current selling pace though inventory growth of 2.5% year-over-year marked the smallest annual increase since April 2022. Price growth continues to diverge sharply by region: the Northeast and Midwest posted gains, the South held roughly flat, and the West remained in negative territory for several consecutive months.

  • Key Takeaway: Housing will not lead the recovery, it will follow, and only after mortgage rates give builders and buyers a reason to come off the sidelines, which requires oil prices to fall further and the Federal Reserve to act.

The Factory Floor and the Labor Market — Patience Required
Industrial production fell 0.5% in March, the first reading to cover the war period, but the decline concentrated in mining and utilities rather than manufacturing, where output barely dipped and February’s estimate earned an upward revision. Motor vehicles and parts stood out as a drag and remain one of the segments most vulnerable to an oil price shock, since surging gasoline prices lead consumers to defer big-ticket purchases and automakers to cut assemblies.

The broader risk: the Global Reporting Initiative (GRI) has surged four standard deviations since the war began, which historically translates to roughly a 1% drag on the level of industrial production. The labor market, by contrast, has not flinched. Initial claims fell 11,000 to 207,000 in the week ended April 11, with the four-week moving average steady at 209,750 and claims running 3.2% below year-ago levels. Continued claims rose to 1.818 million, but the trend remains downward, with the four-week moving average at its lowest point since June 2024.

  • Key Takeaway: The labor market’s calm is real but borrowed. Oil shocks hit employment with a lag, and the geopolitical risk drag on investment and hiring has not yet peaked.

Final Thoughts
The narrative shifted decisively this week. A month ago, markets priced in an open-ended energy war with no clear exit. By last week’s end, Iran has reopened the Strait (only to close it again on Saturday), oil dropped to $80 and the S&P 500 has printed a record high. That is a remarkable reprieve, but it is not an all-clear.

The Federal Open Market Committee (FOMC) faces a delicate balancing act: inflation runs hot on the headline but cool at the core, and the labor market remains stable but increasingly exposed to the lagged effects of a shock whose full economic damage has not yet materialized. Markets have completely priced out a Federal Reserve rate cut this year. President Trump’s threat this week to remove Federal Reserve Chair Jerome Powell drew headlines, but the ongoing Supreme Court case over the dismissal of Governor Lisa Cook carries greater weight. A ruling against the White House would meaningfully limit its ability to reshape the board.

The path from here depends less on the ceasefire text and more on how quickly confidence recovers, among consumers, small businesses and corporate investment committees. Potential gross domestic product (GDP) growth remains north of 2% over the coming decade, almost all of it powered by productivity, and this is anything but stagflation. If history is any guide, that recovery will be measured in quarters, not weeks. The economy entered 2026 with genuine momentum, and nothing in this week’s data says that momentum has broken. But the war bent it, and the scars will shape the trajectory long after the headlines move on.

Oxford Financial Group, Ltd. is a SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The information provided is for general informational purposes only and should not be considered investment, tax, or legal advice. Opinions are those of the author and are subject to change based on market, regulatory or economic conditions. Forward-looking statements are opinions and/or estimates and are not guarantees of future results. Data and opinions are based on sources believed to be reliable, including unaffiliated third parties such as Oxford Economics, but their accuracy cannot be guaranteed. Past performance is not indicative of future results. See important disclosures and disclaimers at https://ofgltd.com/home/disclaimers. OFG-2604-35

Oxford Managing Director Named Advisor of the Year Finalist by InvestmentNews

ekiser on April 16, 2026

Oxford Financial Group, Ltd. is pleased to announce that Managing Director Charles R. Carter, CFP®, CEPA has been named a finalist for Advisor of the Year (Midwest region) in the 2026 InvestmentNews Awards.

The InvestmentNews Awards recognize professionals and firms who exemplify high standards in wealth management, honoring those whose resilience, integrity and dedication are reshaping the future of the industry. Being named a finalist is a distinction reserved for advisors whose work stands apart at a national level.

Charles has spent more than 20 years advising entrepreneurs, wealth creators and multigenerational families through some of the most consequential transitions of their financial lives: business exits, succession planning, estate strategy and the evolution of family governance. He is known for his ability to bring clarity and long-term perspective to complexity, coordinating across legal, tax and investment advisors to help ensure that strategies are not only sound but precisely executed.

As a Managing Director at Oxford, Charles works within the firm’s family office model, integrating estate planning, tax strategy, investment management and generational decision-making into a single cohesive framework. His approach is relational and deeply client-specific, grounded in a genuine understanding of each family’s values, priorities and vision for what comes next.

This recognition is a reflection of the standard Charles holds himself to and the standard Oxford is built on. We congratulate him on this well-deserved honor.

Oxford Financial Group, Ltd. (“Oxford”) is a Registered Investment Advisor (“RIA”) with the U.S. Securities and Exchange Commission (“SEC”) and is headquartered in Carmel, Indiana. Registration with the SEC does not imply a certain level of skill or training. Additional information about Oxford, including our Form ADV and Privacy Policy, is available upon request by calling 800.722.2289 or emailing info@ofgltd.com. The content of this presentation is intended for educational and illustrative purposes only. It should not be construed as investment, tax or legal advice, nor as a recommendation or offer to buy or sell any security or investment product. Tax and legal counsel should be engaged before taking any action. This material has been prepared using original sources believed to be reliable, but no representation is made as to its accuracy or completeness. The views expressed are those of Oxford as of the date of the presentation and are subject to change based on market, regulatory or economic conditions, which may not occur as anticipated. Finalist for the InvestmentNewsAwards are chosen through open nominations and a diverse and unbiased judging panel of experts. Oxford nor its employees paid to participate or be included in the rankings. The 2026 InvestmentNews Awards will be held later this year. View important disclosures and disclaimers at https://ofgltd.com/home/disclaimers/ OFG-2604-20

CIO Macro Trends: Ceasefire, Cease Nothing: Record-Low Confidence Meets a Shock Still in Motion

ekiser on April 14, 2026

The week brought a tentative ceasefire between the US/Israel and Iran and data confirming that the economic damage was already in motion before any diplomat sat down. From record-low consumer sentiment to the hottest Consumer Price Index (CPI) print in four years, the numbers tell a story of an economy absorbing a geopolitical shock with diminishing buffers and rising uncertainty.

Executive Summary

  • The University of Michigan’s consumer sentiment index plunged to 47.6, the lowest reading in the survey’s nearly 75-year history. Year-ahead inflation expectations surged to 4.8% from 3.8%, the largest single-month jump since April 2025.
  • Headline CPI rose 0.9% month-over-month in March, the largest gain since June 2022, driven by gasoline prices that surged more than 20%. Core CPI rose just 0.2%, below the 0.3% consensus, with broad disinflationary trends intact.
  • Consumer spending rose only 0.1% in real terms in February; Oxford Economics Q1 tracking estimate is just 0.7% annualized. Tax refunds up 14% year-over-year are providing a temporary buffer.
  • Equipment spending was tracking 9.7% annualized growth in Q1 prior to the war, but the geopolitical risk index has jumped three standard deviations, threatening to drag equipment investment by roughly 2%.
  • Institute for Supply Management (ISM) nonmanufacturing new orders rose to 60.6, the strongest reading in nearly four years, but the prices index surged 7.7 points to 70.7, the fastest pace since 2022.
  • The fiscal year 2026 deficit forecast has been revised to $2.3 trillion, with International Emergency Economic Powers Act (IEEPA) tariff refunds exceeding $160 billion due by midyear.
  • The ceasefire does not warrant changes to the baseline forecast; oil is expected to average above $100 in Q2.

Sentiment Hits Rock Bottom — And the Floor May Not Hold
The University of Michigan’s consumer sentiment index fell to 47.6 from 53.3 in the April preliminary release, the lowest reading in the survey’s nearly 75-year history. The decline was pervasive, with all demographic groups and all five index components posting setbacks as consumers expressed major concerns over high gas prices and weaker asset values. Notably, the ceasefire was announced just after the survey period for the preliminary results closed; if it holds and translates into lower pump prices and an equity market recovery, the final April reading could see an upward revision. Year-ahead inflation expectations shot up to 4.8% from 3.8%, the largest one-month increase since April 2025, driven by gasoline prices that have skyrocketed since the onset of the war. Long-run expectations rose more modestly to 3.4% from 3.2%, consistent with analysis that long-run expectations track core rather than headline inflation.

  • Key Takeaway: If long-run inflation expectations remain anchored, the Fed retains room to focus on downside labor market risks, but the ceasefire’s durability will determine whether that anchor holds.

CPI — Hot on the Outside, Cool at the Core
The headline CPI surged 0.9% in March, the largest monthly gain since June 2022, as the US/Israel-Iran war left its fingerprints on the data. Retail gasoline averaged $3.70 per gallon, up from $2.93 the prior month, with the CPI for gasoline surging more than 20%. Yet beneath the headline noise, core CPI rose just 0.2%, a tenth below consensus, and the broad disinflationary trends across major core categories remained intact.

The ISM nonmanufacturing prices index reinforced the inflationary pressure on the services side, surging 7.7 points to 70.7, the fastest pace of expansion since 2022, as Middle East transportation disruptions bled into domestic supply chains with the supplier deliveries index rising to 56.2.

April will be uglier still. Pump prices are expected to average above $4 per gallon, contributing at least 0.2 percentage points to the headline, while a statistical quirk from last year’s government shutdown will add roughly 0.1 percentage point via the shelter category. Oxford Economics’ provisional Personal Consumption Expenditures (PCE) nowcast shows headline rising 0.5% and core just 0.1%, a gap reflecting gasoline’s much lower weight in the Fed’s preferred measure and a reminder that this is not 2022. Supply chains are not yet flashing red, the labor market is not overheating and One Big Beautiful Bill Act (OBBBA) stimulus is skewed toward lower marginal propensity to consume households.

  • Key Takeaway: Two consecutive hot headline prints will test patience, but the core message that underlying disinflationary trends remain intact should give the Fed room to act on employment rather than react to oil.

The Consumer — Weakening Before the War Even Hit
The February income and spending data revealed a consumer already losing momentum before the first missile was fired. Personal income contracted 0.1% in nominal terms, largely on one-off hits to dividends and transfer payments. Spending rose 0.5% nominally but just 0.1% in real terms, a tepid rebound from January’s weather-driven stall. Oxford Economics’ nowcast puts Q1 consumer spending at just 0.7% annualized, with a similarly weak gain forecast for Q2 as the drag from the energy shock builds.

If the war were to re-escalate and equity markets came under additional pressure, spending could decline outright in Q2. A partial offset comes from an unusually strong tax refund season. Cumulative refund issuance is up 14% year-over-year, with aggregate refunds expected to finish 19% higher than last year and the average refund reaching $3,813, up 21%.

Consumer credit rose $9.5 billion in February, but revolving credit growth slowed to just 1.8% year-over-year as higher energy prices and weaker spending weigh on demand for credit.

  • Key Takeaway: The consumer entered this shock with less momentum than the headline labor market would suggest, and the energy tax on real incomes has not fully hit yet.

Equipment Spending — Pre-War Strength, Post-War Questions
Headline durable goods orders fell 1.4% in February, dragged by volatile transportation components. But core orders, nondefense capital goods excluding aircraft, rose 0.6%, resuming the strong growth pattern from the second half of 2025. Equipment spending was tracking 9.7% annualized growth in Q1, with shipments up 1.3% in February and capital goods imports buoying estimates of at least a 0.5 percentage point contribution to Q1 GDP growth.

The geopolitical risk index has jumped three standard deviations since the outbreak of the war, which historically translates to a roughly 2% drag on the level of real equipment spending at peak impact. Two structural tailwinds will cushion the blow: the AI buildout continues to drive demand for computers and electronics, and investment incentives under the OBBBA support durable goods spending across categories.

  • Key Takeaway: Business investment entered the geopolitical storm with genuine momentum. The question is whether ceasefire uncertainty freezes the capex pipeline before those structural tailwinds can sustain it.

The Fiscal Reckoning — And the Ceasefire Caveat
The cumulative budget deficit for the first half of FY2026 stands at $1.17 trillion, and the second half will deteriorate markedly as OBBBA tax cuts fully kick in, tariff revenue base effects fade and IEEPA tariff refunds exceeding $160 billion begin flowing to importers by midyear.

FY2026 deficit forecasts are upward. Defense spending is up 3.2% year-over-year on a fiscal year-to-date basis, with interest on the debt up 6%. House Republicans are weighing supplemental defense funding tied to the war that could push the deficit wider still.

The ceasefire, for its part, does not warrant changes to the baseline forecast: the Strait of Hormuz is expected to remain near zero throughput until May, and oil is forecast to be above $100 in Q2.

On the labor front, initial claims rose to 219,000 last week but the four-week moving average held at 209,500, down 6.3% year-over-year; continued claims fell to 1.794 million, the lowest since May 2024.[1] The labor market remains stable, but the war has increased downside risks, and it is too soon to assume the ceasefire will hold.

  • Key Takeaway: The fiscal trajectory was already unsustainable before the war. A prolonged conflict and supplemental defense spending would accelerate the reckoning.

Final Thoughts
The ceasefire is a geopolitical comma, not a period. Markets have priced out the extreme left tail, but the economic damage (record-low confidence, hot headline inflation, weakening consumer spending) is already in the data and will persist regardless of what happens at the negotiating table. The Federal Open Market Committee (FOMC) minutes confirmed what the data have been indicating: upside risks to inflation are colliding with downside risks to employment, and the Fed is likely to prioritize the latter with two rate cuts this year.

The path forward depends less on the ceasefire’s durability than on whether the damage already inflicted — to confidence, to real incomes, to business investment plans — proves self-reinforcing. The labor market has been the last domino standing, and claims data suggest it remains upright for now. But the energy shock operates with a lag, and the consumer entered this episode with less cushion than the headline numbers suggested. If the war re-escalates, the question shifts from how slow growth will be to whether it turns negative. The old playbook of mean-reverting geopolitical risk is obsolete. This is a world where every shock leaves a scar.

Oxford Financial Group, Ltd. is a SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The information provided is for general informational purposes only and should not be considered investment, tax, or legal advice. Opinions are those of the author and are subject to change based on market, regulatory or economic conditions. Forward-looking statements are opinions and/or estimates and are not guarantees of future results. Data and opinions are based on sources believed to be reliable, including unaffiliated third parties such as Oxford Economics, but their accuracy cannot be guaranteed. Past performance is not indicative of future results. See important disclosures and disclaimers at https://ofgltd.com/home/disclaimers. OFG-2604-23.

Business Transfer Planning – A Tale of Two Sellers

ekiser on April 10, 2026

For many business owners considering a sale of their business, maximizing enterprise value becomes a singular focus and the proverbial finish line. Beyond the finish line, however, is the looming reality of the tax haircut this enhanced wealth may face when it passes to heirs.

CIO Macro Trends — First Quarter 2026 in Review

ekiser on April 7, 2026

Three Acts, One Shock and an Economy That Ran Out of Margin

The first quarter of 2026 opened as a Goldilocks story — above-trend growth, cooling inflation, a patient Fed and an AI-driven productivity renaissance — and ended with oil above $100 a barrel, consumer sentiment approaching recessionary territory and a geopolitical supply shock rewriting the macro regime in real time. In ninety days, the narrative traveled from “soft landing at cruising altitude” to “holding pattern in a fog bank.”

The defining analytical challenge for Q2 is whether the structural tailwinds that characterized January and February can outrun the lagged consequences the oil shock has already set in motion. Because, if there is one lesson from Q1, it is that the distance between “manageable tail risk” and “regime change” can collapse in a single weekend.

Executive Summary

  • Growth proved resilient but the trajectory reversed sharply. The quarter opened with Q4 Gross Domestic Product (GDP) tracking near 2% and 2026 growth projected at 2.8%; ISM composites reached their highest levels since mid-2022 by early March. By quarter-end, the GDP forecasts had been cut a full percentage point with the full-year growth forecast revised down to 2.4%.

  • The “jobless expansion” evolved from curiosity to vulnerability. A “low-hire, low-fire” equilibrium persisted throughout the quarter, with initial claims near historical lows. But benchmark revisions revealed prior job growth had been overstated by 71,000 per month, and by March, VAR models projected the oil shock could reduce monthly hiring by 60,000 in Q4.

  • Inflation made a round trip. January Consumer Price Index (CPI) surprised to the downside and disinflation appeared firmly on track; by March, Producer Price Index (PPI) had surged to 3.4% year-over-year, its highest since February 2025, import prices posted their largest monthly gain since March 2022 and headline Personal Consumption Expenditures (PCE) was projected to spike to 3.7% in Q2.

  • Consumer bifurcation deepened into consumer fragility. Sentiment deteriorated from 56.4 in January to 53.3 by late March, approaching recessionary territory. The savings rate hit multi-year lows, equity markets shed more than 4% and the consumption forecast was slashed to 1.9% for 2026, the weakest since 2013 outside the pandemic.

  • AI investment and energy infrastructure emerged as structural bright spots. Capital goods imports rose 27.5% year-over-year while all other imports fell. Data center construction expanded 31.3% year-over-year and mining capex intentions ran consistent with 20%-plus growth as West Texas Intermediate (WTI) stood well above breakeven. In energy and AI related capital expenditures we saw two sectors where geopolitical disruption seemed to accelerate rather than dampened spending.

From Goldilocks to Oil Shock — A Quarter in Three Acts
The quarter opened with quiet optimism: Oxford Economics estimated Q4 GDP growth tracking closer to 2% annualized, the labor market was settled into a stable “low-hire, low-fire” equilibrium, and headline CPI had closed 2025 at 2.7%, suggesting disinflation was firmly on track.

The consumer was bifurcated but spending. The top 20% of households drove a near-record share of discretionary consumption while the bottom 80% fell further behind, but the aggregate picture held. By mid-February, the outlook had actually brightened. ISM manufacturing jumped to 52.6, the first expansion reading in nearly a year. Services accelerated to their strongest composite pace since July 2022, and the Supreme Court’s tariff ruling dropped the effective tariff rate from 12.7% to 8.3%.

Then, on February 28th, everything changed. The US/Israel-Iran war closed the Strait of Hormuz to commercial shipping, oil prices surged above $100 per barrel, and the International Energy Agency coordinated a release of 400 million barrels from strategic reserves, a historically large drawdown that markets interpreted less as relief than as confirmation of the conflict’s expected duration. In a single weekend, the dominant macro question shifted from “how fast does inflation reach target?” to “how deep does the damage go before it shows up in the data?”

  • Key Takeaway: Q1 was a quarter of three acts — quiet confidence, productive rotation and geopolitical regime change — and the speed of the transition is itself a reminder that supply shocks do not announce themselves on a schedule the market can price in advance.

The Productivity Renaissance — And Its Limits
The most consequential quiet story of Q1 was the economy’s productivity performance. Nonfarm productivity grew 2.2% annually since 2019, roughly double the pace of the prior decade. This was a trend confirmed by preliminary Q4 data showing 2.8% annualized growth, until the final revision marked that figure down to 1.8%.

The Employment Cost Index reinforced the narrative, with Q4 wages rising just 3.4% year-over-year, the slowest since Q2 2021 and a pace consistent with the Fed’s 2% inflation target given trend productivity. Unit labor costs rose 4.4% in Q4, a number that in a prior cycle would have triggered Fed alarm, but the productivity backdrop allowed us to conclude that labor was not the primary inflationary driver, preserving the intellectual foundation for the Fed’s patient stance.

AI-driven capital deepening boosted GDP by an estimated 0.1 percentage points in 2025 and is projected to contribute 0.4 percentage points in 2026, a structural tailwind that operated quietly beneath the quarter’s headline drama. The productivity buffer is real, but thin: any erosion in Q1 2026 data would crack the analytical foundation on which the Fed’s June and September rate cut projections depend.

  • Key Takeaway: Productivity was the quarter’s most important macro variable precisely because it was the least discussed. It gave the Fed its permission slip for patience, blunted the wage-price spiral narrative and raised the economy’s speed limit at precisely the moment it was needed most.

The K-Shaped Consumer — From Bifurcation to Fragility
The consumer narrative underwent the quarter’s most dramatic transformation. In January, the University of Michigan sentiment index improved to 56.4, year-ahead inflation expectations eased to 4.0% and Oxford Economics projected consumption growth near 3%, all suggesting the consumer was resilient if unevenly so. The structural bifurcation, however, was already pronounced: the top 20% of households were spending a near-record share on discretionary goods, equities comprised a record 47% of household financial assets and the personal savings rate had fallen to 3.5%, with nearly 60% of Q3 consumption growth financed by drawing down savings rather than income.

By late March, the picture had deteriorated materially: The University of Michigan Consumer Sentiment Index fell to 53.3, year-ahead inflation expectations surged to 3.8%, the largest single-month increase since April 2025 and long-run expectations reached 3.2%. Full-year consumption growth was cut to 1.9%, the weakest since 2013 outside the pandemic. Equity markets shed more than 4% over the final three weeks of the quarter, reversing the wealth-effect engine that had been driving upper-income spending. The consumer did not break in Q1, but the architecture of resilience — thin savings, equity dependence, confidence disconnected from spending — revealed itself as fragility disguised as stamina.

  • Key Takeaway: The quarter’s consumer story is a cautionary tale about wealth-dependent consumption: when the asset prices that sustain spending become the channel through which shocks transmit, the same households carrying the economy become its point of maximum vulnerability.

The AI Economy — Structural Tailwind Through the Storm
If there was a single investment theme that traversed the entire quarter without interruption, it was AI-driven capital formation. Trade data revealed a striking divergence: over the past year, imports of capital goods — computers, semiconductors and related equipment — rose 27.5%, while all other imports declined 17.4%. This was not broad-based demand overheating but targeted capital deepening, and by quarter-end the investment pipeline showed no signs of deceleration. Capital goods imports were up 25% year-over-year in the most recent data, and data center construction was expanding 31.3% year-over-year, the one category of investment that remained effectively rate-insensitive throughout the quarter.

The AI build-out also created its own inflationary micro-narrative: a Dynamic Random-Access Memory (DRAM) semiconductor shortage pushed electronic components producer prices 17.8% higher year-over-year by February, a feature of excess demand rather than a warning sign. Alongside AI, defense spending emerged as a second structural pillar. The One Big Beautiful Bill Act continued to support capital formation, and the Iran conflict arguably accelerated rather than dampened the defense investment thesis. The AI and defense themes stand apart from the rest of the macro landscape: they are the two sectors where geopolitical disruption and elevated uncertainty have functioned as accelerants rather than headwinds.

  • Key Takeaway: AI infrastructure and defense do not appear to be cyclical recovery trades, but rather, structural reallocation themes. At least through Q1, they carry a momentum that neither oil shocks nor policy uncertainty have been able to interrupt.

The Oil Shock — Anatomy and Lagged Consequences
The February 28 onset of the US/Israel-Iran conflict was the quarter’s defining inflection point, and its consequences will dominate the macro landscape well into the second half of 2026. The immediate transmission was swift: 

  • February import prices rose 1.3% month-over-month, the largest gain since March 2022, driven by fuel imports surging 3.8% and nonfuel imports rising 1.1%.

  • The February PPI rose to 3.4% year-over-year, its highest since February 2025, and critically, none of those prints captured the full March shock.

  • Oxford Economists project headline CPI will average 3.3% in 2026, an increase of 0.8 percentage points from the pre-war baseline, with PCE inflation spiking to 3.7% in Q2 before settling at a core rate of 2.8% for the full year.

But the inflation channel is only the beginning. Oxford Economics’ VAR model projects that the current level of policy uncertainty, up 20% in Q1, could reduce monthly hiring by approximately 60,000 by Q4. This is a drag operating on a 5-to-12-month lag that means the labor market’s current calm is a pre-storm reading, not an all-clear. The nonlinear framework is the most sobering piece of the analysis: when oil prices move more than 20% above their prior three-year peak, as they have, real consumption historically declines by more than 1% over the subsequent six quarters, a magnitude comparable to the consumption impact of the 1973 Arab oil embargo.

  • Key Takeaway: The oil shock’s most dangerous feature is its lag structure. The inflation hit arrives first, the consumption drag follows and the employment impact comes last, which means every current high-frequency indicator could be understating the damage already in motion.

Final Thoughts
The first quarter of 2026 will be remembered as the quarter in which the US economy lost its margin for error. Through January and February, the expansion rested on genuinely constructive foundations: productivity was rising, AI investment was reshaping the capital stock, inflation was cooling and the Fed had the luxury of patience. That foundation has not crumbled as the structural tailwinds are real and remain intact. However, the oil shock has imposed a stress test that the economy must now pass with far less room for disappointment.

GDP growth has been revised down to 2.4% from 2.8%, the S&P 500’s correction trajectory is tracking the 1973 Arab oil embargo analog with uncomfortable precision, and the consumption outlook has deteriorated faster than the hard data currently reflects. Simultaneously, there are pockets where capital is accelerating into the shock rather than retreating from it. With WTI over $100 per barrel, standing well above the mid-sixties production breakeven level, mining-related capex is running consistent with more than 20% year-over-year growth, and data center construction expanding is at 31.3% year-over-year.

The quarter’s central lesson is that an economy built on narrow pillars can look remarkably strong until the ground shifts, and the ground shifted on February 28. The question for Q2 is not whether the lagged damage arrives, but whether the structural tailwinds that defined the first two months of the year can absorb it. As we wrote at the start of the quarter: the economy is stronger than it feels, less balanced than it looks and more resilient than the headlines suggest. Two out of three still hold. The balance is what changed.

Oxford Financial Group, Ltd. is a SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The information provided is for general informational purposes only and should not be considered investment, tax, or legal advice. Opinions are those of the author and are subject to change based on market, regulatory or economic conditions. Forward-looking statements are opinions and/or estimates and are not guarantees of future results. Data and opinions are based on sources believed to be reliable, including unaffiliated third parties such as Oxford Economics, but their accuracy cannot be guaranteed. Past performance is not indicative of future results. See important disclosures and disclaimers at https://ofgltd.com/home/disclaimers. OFG-2604-7

CIO Macro Trends – Tick, Tock: The Oil Shock’s Lagged Damage Is Just Getting Started

ekiser on March 30, 2026

Four weeks into the US/Israel-Iran conflict, the US economy is caught in a peculiar temporal illusion: the hard data still looks resilient, the soft data has already cracked and the real damage is queuing up like aircraft in a holding pattern, visible on the radar, not yet on the runway. The oil shock does not announce itself on arrival; it operates on a 5- to 12-month lag, which means the labor market’s surface calm and the Fed’s studied equanimity are not reassurance, rather their turning is simply a matter of when, not if.

Executive Summary

  • Consumer sentiment has broken; spending is next. UMich sentiment fell to just above recessionary territory with year-ahead inflation expectations surging and long-run expectations at levels that historically compromise Fed credibility. 2026 consumption growth may end up the slowest since 2013 outside the pandemic.
  • Import prices posted their largest monthly gain since March 2022. The month-over-month surge reflects three converging vectors: energy costs, dollar weakness and AI-related capital goods, together engineering a second quarter headline PCE spike and a rising full-year core PCE.
  • Construction spending contracted and the GDP Nowcast was sharply revised. January construction fell, prompting some economists to cut their GDP projections, although energy infrastructure and AI data center construction are providing meaningful positive offsets.
  • Productivity was revised lower but remains the economy’s analytical buffer. Fourth quarter nonfarm productivity was cut, yet the trend since 2019 continues to suppress wage-driven inflation and gives the Fed its narrowest possible intellectual justification for patience.
  • The labor market is running on borrowed time. Initial claims remain historically low, but economists project that policy uncertainty alone could reduce monthly hiring by the end of the year, a signal that the jobs data has not yet processed what the rest of the economy may already know.

Sentiment Breaks, Spending Next?

The University of Michigan’s final March sentiment reading came in at 53.3, a level that has historically separated soft landings from harder outcomes. Year-ahead inflation expectations jumped to 3.8%, marking the largest single-month increase since April 2025, while long-run expectations reached 3.2%, a threshold that historically places the Fed in an analytically untenable position, forced to choose between credibility and growth. 

The sentiment damage is not evenly distributed: middle- and high-income households, those most exposed to the equity correction now underway, drove the drop. Assuming that real disposable income growth from higher gas prices slow overall consumption growth, this will actually be felt most by lower income households given a larger share of their overall spending goes towards filling up at the pump. Oxford Economics now projects full-year 2026 consumption growth at just 1.9%, the weakest pace since 2013, excluding the pandemic, with meaningful downside risk if oil prices remain elevated through the summer. The distance between broken sentiment and broken spending has historically been measured in months, not years, and the clock is already running.


  • Key Takeaway: When near-term and long-run inflation expectations move in tandem at these levels, the Fed’s credibility erodes precisely when monetary flexibility is most needed.

Import Prices — Three Vectors, One Direction
The weekly data makes clear we are still too early to see the full hit from higher energy prices in March, but February’s import price report offered a preview of where the transmission is heading. February import prices rose 1.3% month-over-month, the largest monthly gain since March 2022, driven by three distinct but mutually reinforcing vectors. Energy-related imports surged 3.8%, reflecting Hormuz disruption now embedded in every cargo manifest; nonfuel imports rose 1.1%, with industrial supplies up 9.6% year-over-year and AI-related capital goods up 3.9% year-over-year. The dollar’s depreciation is acting as an independent multiplier, systematically converting every percentage point of foreign price pressure into domestic inflation at a more efficient rate than in prior cycles. Consumer goods prices, which had provided rare deflationary relief, have now turned positive, closing the last escape valve on which the Fed was quietly relying. Oxford Economics projects Personal Consumption Expenditures (PCE) inflation of 3.7% in Q2 2026 and core PCE at 2.8% for the full year, with two Fed rate cuts penciled in for June and September, a calendar that will require meaningful data cooperation to hold.


  • Key Takeaway: The import price vector is no longer a single-source story; it is a three-headed inflationary transmission (energy, dollar and AI capex).

Construction and the Uncertainty Tax
January construction spending declined 0.3%, a modest headline that nevertheless landed with strategic weight. Oxford Economics immediately revised its GDP Nowcast from 3.7% to 2.8% annualized, a full percentage point haircut reflecting not just the construction miss but the broader uncertainty tax now embedded in capital allocation decisions. Residential investment, still burdened by the compounding pressures of rate sensitivity and oil-shock affordability erosion, has been cut to a 2.0% forecast for 2026, while nonresidential structures are now projected at 3.6%, down from a prior 4.2%. 

Against this backdrop, two sectors are quietly defying gravity: with West Texas Intermediate (WTI) crude at $95 per barrel standing 44% above the $66 production breakeven, drilling-related capex intentions are running consistent with more than 20% year-over-year growth in capital spending, one of the most decisive positive signals in the construction data. Data center construction tells an equally compelling counter-narrative, expanding 31.3% year-over-year as AI infrastructure build-out remains effectively rate-insensitive in the current environment. The divergence between uncertainty-constrained and structurally-driven capital formation is itself a portfolio signal worth heeding.


  • Key Takeaway: The construction contraction is not monolithic: energy infrastructure and AI-capital expenditures are the two categories where capital commitment is actually accelerating, despite broader construction spending declining.

Productivity — The Economy’s Quiet Buffer
Fourth quarter 2025 nonfarm productivity was revised down to 1.8% from a preliminary 2.8%. Although a meaningful reduction, it nevertheless preserves the more strategically important data point: the economy’s underlying productivity trend since 2019 remains approximately 2.2% per annum, well ahead of the 1.5% from the prior cycle. 

Unit labor costs rose 4.4% in the fourth quarter — a reading that in an earlier cycle would have triggered immediate Fed concern — but the productivity backdrop indicates that labor is not now the primary inflationary driver. That inference carries significant strategic weight: it means the Fed retains a narrow analytical justification for focusing on import-driven and energy-driven inflation rather than a wage-price spiral, narrowly preserving the case for the June and September cuts many are expecting. The productivity buffer is real but thin; if Q1 2025 data shows further erosion, the intellectual foundation supporting the current Fed patience narrative begins to crack, and the rate path will need to be repriced accordingly.


  • Key Takeaway: Productivity is the Fed’s permission slip for patience with the explicit caveat that any first quarter 2026 productivity disappointment would warrant a refreshed look.

Labor Market — The Clock Is Ticking
Initial jobless claims for the week ending March 21 came in at 210,000, a reading that on its face suggests an economy with no visible stress in its labor market and therein lies the strategic danger. Continued claims fell to 1.819 million, the lowest reading since May 2024, and the four-week moving average sits at 210,500, a portrait of labor market tightness that has led some observers to dismiss the oil shock narrative as manageable. That view should be taken with a bit of caution, however, as the oil shock employment transmission mechanism operates on a 5-to-12-month lag, meaning the stress already set in motion will not appear in any high-frequency indicator for months. An estimated quantification by Oxford Economics is sobering. Oxford Economics’ VAR model projects that the current level of policy uncertainty, up 20% in the first quarter of 2026, could reduce monthly hiring by approximately 60,000 by the fourth quarter of 2026, a drag sufficient to move the unemployment rate meaningfully without appearing in any data the Fed will see before September. The labor market’s current calm is a pre-storm reading, not an all-clear signal.


  • Key Takeaway: The 5- to12-month employment lag is the most underappreciated risk in the current consensus view, with the potential for a meaningful end-of-year deterioration in the data.

Final Thoughts: Lagged Reality Versus Current Perception
The defining analytical challenge of this moment is not the data we have, it is the data that is already in motion but has not yet registered. Oil price spikes can cause nonlinear reactions. When oil prices move more than 20% above their prior three-year peak, as they have, real consumption historically declines by over 1% over the subsequent six quarters. The portfolio implications are direct: the combination of a productivity-buffered but inflation-pressured Fed, a consumption outlook deteriorating faster than the hard data reflects, and an energy sector that is simultaneously the source of the shock and its primary beneficiary is a reminder of why true portfolio diversification matters. The clock is ticking. The question is not whether the lagged damage arrives, but whether portfolios are built to weather it when it does.

Oxford Financial Group, Ltd. is a SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The information provided is for general informational purposes only and should not be considered investment, tax, or legal advice. Opinions are those of the author and are subject to change based on market, regulatory or economic conditions. Forward-looking statements are opinions and/or estimates and are not guarantees of future results. Data and opinions are based on sources believed to be reliable, including unaffiliated third parties such as Oxford Economics, but their accuracy cannot be guaranteed. Past performance is not indicative of future results. See important disclosures and disclaimers at https://ofgltd.com/home/disclaimersOFG-2603-50

Family Office Structures and Deductibility

ekiser on March 25, 2026

When families experience significant financial success, whether from the sale of a business or years of disciplined investing, they often begin considering how to best manage that wealth for both the current and future generations.

CIO Macro Trends – Strait Jacket: Oil Shock, Frozen Housing and a Fed on the Fence

ekiser on March 23, 2026

Three weeks into the US/Israel-Iran war, the economic data is telling two very different stories — one of an economy that was performing admirably before February 28, and one now bracing for a supply shock not seen in years. Somewhere between the Strait of Hormuz and the Fed’s meeting room, the macro regime has shifted meaningfully; and the difference between “temporary shock” and “regime change” is a fine line to walk. As the saying goes in energy markets: when the Strait of Hormuz sneezes, the rest of the economy catches a cold.

Executive Summary

  • The US/Israel-Iran war is the defining macro event. Now in its third week with no off-ramp visible, the conflict has disrupted oil flows through the Strait of Hormuz, pushing prices above $100/barrel and triggering a historic Strategic Petroleum Reserve (SPR) release that may do more to signal duration than dampen prices.
  • Inflation is re-accelerating. Producer Price Index (PPI) hit its highest level since February 2025, and the real pain has not yet registered. The oil spike in March will push the next report higher still. Headline Consumer Price Index (CPI) is now expected to average 3.3% in 2026, up 0.8 percentage points from the pre-war baseline.
  • The consumer is in a squeeze. Real incomes are compressing, savings buffers are historically thin and equity markets have shed more than 4% over three weeks, precisely when wealth effects matter most. At the same time, new home sales collapsed in January, mortgage rates have climbed back to 6.22% and the long-awaited recovery is further delayed.
  • The labor market is in fragile equilibrium, and the Fed is on hold, for now. Initial claims are healthy, but the “no-hire, no-fire” dynamic is increasingly vulnerable to geopolitical uncertainty. Two cuts remain the baseline of many (June and September), but financial markets are pricing a 40% chance of a rate hike, a divergence worth watching.
  • AI investment and defense spending are the islands of stability in an otherwise turbulent investment outlook, with both themes structurally intact and arguably strengthening.
  • The Oil Shock: It is Not the Size of the Strait, It is What Flows Through It

Industrial production was performing well prior to the outbreak of the US/Israel-Iran war, rising to its highest level since summer 2019, a strong baseline that now reads like a prewar artifact. Oil prices have surged above $100 per barrel, with global prices running more than 40% above year-ago levels in March. The International Energy Agency (IEA) coordinated a release of 400 million barrels from strategic reserves, with the US contributing 172 million barrels from the Strategic Petroleum Reserve, a historically large drawdown representing 42% of available reserves. Context matters, however: roughly 20 million barrels per day previously flowed through the now-closed Strait of Hormuz, and the IEA release falls well short of replacing that disruption. Markets may interpret the announcement as a signal the war is becoming more protracted, sending prices higher in response. For portfolios, the energy trade is not subtle: commodities, energy equities and real assets are the near-term beneficiaries of a supply shock with no clear resolution timeline.

  • Key Takeaway: The oil shock is structural in its immediate impact and duration-dependent in its severity, energy assets seem to offer upside, but the real portfolio risk lies in what higher oil does downstream to consumers, manufacturers and the Fed’s optionality.

Inflation Reignites: The Pre-War Data Was Already Telling a Story
The February PPI rose a stronger-than-expected 0.7%, pushing PPI inflation to 3.4% year-over-year its highest reading since February 2025. Food prices surged 2.4% and energy 2.3%, while core PPI reached 3.9% year-over-year. Critically, none of this captures the March oil shock: with global oil prices now more than 40% above year-ago levels, the next PPI report is very likely to be worse, particularly in food, energy and transportation categories. Trade services prices remain elevated at 5.1% year-over-year as tariff volatility continues to complicate the policy landscape. A second inflation vector, the AI-driven DRAM semiconductor shortage, pushed electronic components producer prices 17.8% higher year-over-year in February. With Oxford Economics Personal Consumption Expenditures (PCE) nowcast pointing to headline PCE inflation reaching 3.5% in Q2, the window for Fed cuts has narrowed, though it has not closed. Think of it as the Fed standing in front of an open refrigerator: the house is on fire, but the cold air feels nice for now.

  • Key Takeaway: Inflation is not one problem but three: an oil shock, an AI-driven supply constraint and persistent trade-related price pressures.

The Consumer Under Pressure: Thin Buffers, Thick Headwinds
The American consumer entered this crisis in decent shape, but decent is doing a lot of heavy lifting right now. With personal savings rates already at historically low levels, those buffers are thin, and higher energy prices at the pump will force difficult household trade-offs. Equity markets have shed more than 4% over the past three weeks, eroding the wealth-effect tailwind that higher-income households have relied upon as an engine of spending. With stocks now a bigger driver of consumption than housing, equity weakness matters more than it once did. The housing channel compounds the picture: new home sales plunged to 587,000 Seasonally Adjusted Annual Rate (SAAR) in January, well below consensus expectations and down 11.3% year-over-year, as winter weather and rising mortgage costs collided. The Iran war has already pushed mortgage rates up by more than 20 basis points, with the 30-year rate back to 6.22%. The inventory of completed new homes for sale remains at levels last seen in July 2009, capping the upside for housing starts until that supply is absorbed.

  • Key Takeaway: The consumer is caught in a price-and-savings squeeze, with housing as an additional drag.

Labor and the Fed: Threading the Needle on a No-Hire, No-Fire Economy
Initial jobless claims fell to 205,000 in the week ended March 14, the lowest since the start of the year, with the four-week moving average declining to 210,750 and tracking 8.2% below year-ago levels. On the surface, this is a healthy labor market. But as Fed Chair Powell acknowledged, it is not a “comfortable balance.” The no-hire, no-fire dynamic, low layoffs paired with weak hiring, leaves the economy peculiarly vulnerable to uncertainty that discourages businesses from adding headcount. The Iran war is expected to keep unemployment elevated for longer, delaying the labor market improvement that would otherwise support consumer spending. For many, the baseline remains two Fed rate cuts in 2026 (June and September) with the Fed expected to look through this oil-driven inflation shock and focus on downside labor risks. Yet financial markets are currently pricing a 40% chance of a rate hike by year-end, a meaningful divergence that deserves respect as a tail risk. If inflation expectations de-anchor, or if the war proves more protracted than the baseline assumes, the Fed’s calculus shifts quickly.

  • Key Takeaway: The Fed is threading a needle between an oil-driven inflation spike and a labor market that was already fragile before the war.

AI and Defense: The Structural Bright Spots in an Uncertain Landscape
Amid the turbulence, two investment themes remain structurally intact and, arguably, strengthening. The AI capital expenditure cycle shows no signs of abatement: Q1 source data confirm no sudden stop in AI investment, with the race to build out data center capacity carrying a momentum that geopolitical headwinds will not easily interrupt. The Dynamic Random-Access Memory (DRAM) semiconductor shortage — a byproduct of surging AI demand — is pushing electronic components producer prices 17.8% above year-ago levels, a feature of excess demand rather than a warning sign. The second pillar of stability is defense: last year’s Republican legislation boosted federal spending on national defense, which is now feeding into production of defense and space equipment. The One Big Beautiful Bill Act continues to support broader capital formation by raising the after-tax return on investment, though near-term uncertainty is causing most businesses outside AI and mining to defer decisions until the geopolitical picture clarifies. If the last decade was defined by smartphones and streaming, this one may well be defined by GPUs, gigawatts and guided munitions.

  • Key Takeaway: AI infrastructure and defense represent two of the most durable structural investment themes available, and unlike most sectors, they are among the few where geopolitical disruption may actually accelerate spending rather than dampen it.

CIO View: The Strait Is Narrow, but the Shadow Is Long
The macro regime has shifted materially in three weeks. What began as a “steady growth with manageable inflation” environment has become an oil supply shock with layered consequences — for consumers, manufacturers, the housing market and the Federal Reserve’s room to maneuver. The base case — a short war, a partial reopening of the Strait of Hormuz by May and a consumer spending rebound in the second half of 2026 — is coherent but carries meaningful execution risk, particularly given that hostilities have escalated beyond initial expectations. GDP growth has been revised down 0.4 percentage points to 2.4% for 2026, with consumer spending bearing the primary burden of adjustment. The diplomatic calendar is now the most important “data point” of the coming weeks because the market has learned, yet again, that the Strait of Hormuz is a very small body of water with an outsized influence on everything downstream.

Oxford Financial Group, Ltd. is a SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The information provided is for general informational purposes only and should not be considered investment, tax, or legal advice. Opinions are those of the author and are subject to change based on market, regulatory or economic conditions. Forward-looking statements are opinions and/or estimates and are not guarantees of future results. Data and opinions are based on sources believed to be reliable, including unaffiliated third parties such as Oxford Economics, but their accuracy cannot be guaranteed. Past performance is not indicative of future results. See important disclosures and disclaimers at https://ofgltd.com/home/disclaimersOFG-2603-44