Goldman Sachs: If Middle East Situation Deteriorates Rapidly, Fed Has Room for Two Rate Cuts This Year

April 4 — Iranian Foreign Minister Araghchi said Iran’s position on peace talks has been “misrepresented by U.S. media.” “We greatly appreciate Pakistan’s efforts and have never refused to travel to Islamabad. Our focus is whether this illegal war imposed on us can end completely and permanently.”

April 4: Wall Street Journal’s “Fed Whisperer” Nick Timiraos reported that 178,000 jobs added in March reversed February’s sharp drop, while the unemployment rate fell to 4.3%. But key details are less upbeat: average worker wage growth slowed to its lowest year-over-year pace in five years (since the pandemic). Averaging the two volatile months reveals a clearer trend: just 22,500 jobs added monthly on average. Two years ago, that figure would have sparked alarms; now, it may still be viewed as acceptable. Fed officials are still trying to explain this shift. San Francisco Fed President Mary Daly wrote Friday: “It’s hard to tell the public an economy with no job growth still fits full employment.” The dynamic is especially fragile as new supply shocks loom: ongoing Iran tensions, high fuel costs, or commodity shortages could squeeze businesses and consumers, leaving the labor market without a cushion to absorb the hit. Meanwhile, inflation worries threaten to dim rate-cut certainty

On April 4, Iran’s top joint military command announced a new air defense system had become operational, noting it will exercise full control over the country’s airspace.

April 4th — Despite a slight easing of U.S.-Iran tensions over the weekend, the U.S. continued searching for a crew member from an F-15E fighter jet downed by Iran on Friday. Tehran, meanwhile, launched ongoing attacks on Gulf Arab states and Israel across the weekend. A separate U.S. military aircraft crashed in the Persian Gulf the same day (Friday). Both sides are set to maintain high tensions next week, with multiple stakeholders appearing to have fully anticipated potential U.S. ground force deployment into Iran. Aside from the Iran conflict, next week’s macro events will be headlined by the Federal Reserve’s meeting minutes, with analysts expecting the document to confirm the hawkish tilt reflected in the latest dot plot. The key event schedule is below: - **Monday 22:00**: U.S. March ISM Non-Manufacturing PMI - **Tuesday 15:50–16:30**: France/Germany/Eurozone/UK March Final Services PMI - **Tuesday 23:00**: U.S. New York Fed March 1-Year Inflation Expectations - **Wed

April 4: Iranian state media reports Iran says a ship linked to Israel was damaged by an unmanned drone in the Gulf of Oman, forced to stop at sea and caught fire.

April 4th: A CryptoQuant analysis finds the crypto market’s sentiment and fund flows are out of sync: the Fear & Greed Index is in extreme fear territory (8–14), but March ETF net inflows topped $1 billion; the Coinbase Premium Index remains negative, reflecting limited U.S. institutional participation. Geopolitical tensions (Iran conflict) have caused price swings, with the market adopting a wait-and-see stance—overall demand is slowing rather than seeing panic selling. Despite a ~47% drop from its October 2025 all-time high of $126,000 (far less than the 85%+ crashes in 2013 and 2017), analyst Zack Wainwright notes this signals Bitcoin’s market is maturing, with volatility steadily contracting. Potential catalysts include: Morgan Stanley’s greenlight for a low-fee Bitcoin ETF (granting access to $6.2 trillion overseen by 16,000 financial advisors) and the Strategy STRC preferred stock product’s ongoing monthly purchase of 44,000 BTC (which could add steady buying pressure). Sho