Federal Reserve Governor Jefferson: No Need to Hurry to Further Cut Interest Rates, Strong Economy Makes Caution Appropriate

On March 17, White House economic advisor Kevin Hassett stated regarding Iran that oil tankers have begun transiting the Strait of Hormuz. The Iran conflict will end in the short term—it will be resolved in weeks, not months. The U.S. economy remains "fundamentally strong." U.S. President Donald Trump will not back down until the Iran situation is fully resolved, according to FXStreet.

March 17 – Casey Wood, Chief Investment Officer at ARK Investment Management, said artificial intelligence (AI) has already boosted labor productivity and will drive even larger gains over the next decade. Non-farm productivity is up 2.8% year-over-year, but new AI tools are expected to push that growth rate to around 6% annually. The productivity lift from large language models (LLMs) is striking, she noted—adding even “once skeptical” colleagues at her firm are “very shocked” by their performance. Wood highlighted strong revenue growth among leading AI model providers: AntoPee’s annualized revenue hits $19 billion, while Opuni’s revenue has grown from $20 billion to $25 billion. “Over the next five to 10 years, we expect revenue in this space to surge from nearly zero to $10 trillion–$12 trillion,” she said. “That will have a major impact on gross domestic product (GDP).” (Source: Jinshi)

On March 17, the Israel Defense Forces (IDF) announced it had launched a large-scale airstrike against Iran. Earlier, Israel’s foreign minister stated the Iranian regime’s fate could only be determined by the Iranian people. Meanwhile, Lebanon fired 2,000 shells and drones at Israel. (Jinshi)

March 17th — Payment giant PayPal is significantly expanding global access to its stablecoin, PayPal USD (PYUSD). May Zabaneh, the company’s Head of Crypto, noted that starting this month, users in 70 countries can hold PYUSD in their PayPal wallets. Previously, this feature was only available to users in the U.S. and U.K. Newly supported markets span South America, Africa, and Asia, including Uganda, Colombia, and Peru. These nations are among PayPal’s roughly 200 operational countries worldwide. This past February, Enrique Lores—a former HP executive—was named PayPal’s new CEO, as the company presses ahead with its stablecoin and crypto payment strategy.

**March 17** A short-term rate option trade betting the Federal Reserve will keep interest rates high long-term closed out for a roughly $10 million profit this week, ahead of the central bank’s policy meeting. Initiated in January, the trade was tied to Secured Overnight Financing Rate (SOFR)-linked options, with its core wager that U.S. interest rates would exceed market consensus by mid-2028. Chicago Mercantile Exchange (CME) open interest data showed selling activity in the related options last Friday, confirming the profitable position closure. The trade remains anonymous—no specific institution or individual has been identified yet. Market analysts note the trade was positioned before the Middle East conflict escalated. Recent crude oil price surges (to their highest level since 2022) have reignited inflation concerns, prompting traders to scale back Fed rate-cut expectations. This pushed SOFR futures lower and lifted corresponding put option prices, driving the profi

**Forex traders are piling into safe-haven assets on March 17 to brace for potential extreme volatility, closely tracking Middle East developments to prepare for what lies ahead.** Following the initial shock of a war outbreak and oil prices surging to $100 a barrel, investors are leveraging this relatively calm period to buy options with low probability but high potential returns in the event of sudden exchange rate swings. Demand for hedging options against extreme exchange rate fluctuations—such as butterfly options—has risen, with euro-dollar options hitting an 11-month high in early March. (FXStreet)