UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Perceptions on the cost of war'
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Mar 13, 2026 Conflicting US messaging about the Gulf war and the Strait of Hormuz raises market uncertainty. Iran’s pledge to keep Hormuz closed and a possible jump to $200 oil are discussed. US income, spending, PCE and consumer resilience despite lower savings get attention. Rising gasoline prices, tariff threats, and quirks in Michigan sentiment and JOLTS data are covered.
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US Administration Messages Are Conflicting
- US administration statements on the Gulf war are inconsistent, creating policy confusion.
- Paul Donovan contrasts Treasury Secretary Besant's denial with later clarifications that Iran was likely mining the Strait of Hormuz and Iran's pledge to keep it closed.
Economic Rhetoric Contradicts Crisis Moves
- Mixed signals extend to economic policy with the President touting US oil strength then seeking emergency Fed rate cuts.
- Donovan highlights this contradiction as evidence US policy uncertainty likely exceeds Iranian policy uncertainty now.
Consumers Are Cushioning Higher Gas Prices
- Higher gasoline prices and past falls in saving rates give resilience to US consumer spending.
- Donovan notes retail gasoline prices are up roughly 29% from the year's lows while households reduced savings by 1.5 percentage points last year.