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Posted March 18, 2026 at 12:42 pm
Oil prices are swinging as geopolitical tensions rise, leaving markets caught between conflict-driven shocks and an increasingly cautious Federal Reserve. In this IBKR Midweek episode, we break down what’s driving crude’s volatility, shifting rate expectations and what investors should watch next.
The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.
Hi everyone, this is Jeff Praissman for Interactive Brokers, and it’s my pleasure to welcome back to the IBKR Podcast Studio, Scott Bauer from Prosper Trading Academy. Hey Scott, how are you?
Jeff, I’m great. I just wish there was a little bit more snow out here in Colorado where I am right now, but it is what it is.
Well, I guess if you didn’t leave Chicago, you’d have that snow, right?
Exactly right.
Anyway, you know, obviously as always, love having you come in here on Wednesday mornings for a sort of five-minute market recap from the week before and kind of looking forward. I want to jump right into it. Scott, let’s talk about what everyone’s thinking about—crude oil prices, right? One day they’re spiking up, the next day they’re cooling off. Is this 90 to 105 the new range for a while, do you think? Or do you think it’ll kind of get back to the pre-conflict price of 60–70?
Well, sure. I think 60–70 is longer term where we’re going to be. What does longer term mean? I mean, it means when there’s a de-escalation or this whole conflict is over, because the bottom line is economics will still take over and there’s still way more supply than there is demand. But that’s the question—when is that going to happen? So for right now, sure, 90–105 is this range, but that can change, as we know, in just a nanosecond. So I would suggest that if anyone is trading crude futures, you’ve got to do it very diligently. Have some stops in there. But yeah, that’s the range for now.
Right. And we’re right in the middle of the Federal Reserve March 17th–18th meeting. It kicked off yesterday and is going through today. And obviously, with this heightened uncertainty we just talked about—from the Iran conflict and new global tariffs that seem to keep popping up and going away each day—how might these external shocks influence the Fed’s rate decision and their forward guidance?
I don’t know about you, but I’d love to be in the meeting room with Powell today. The market is now pricing in no cuts until maybe even the fourth quarter. The PPI print this morning certainly didn’t help. That muddied the waters from an inflation standpoint, and that doesn’t even include what we may or may not see as a shock given the Iran escalation, the Iran conflict. So yeah, there is definitely heightened uncertainty. And I think the script is already written—we’ll hear from Jerome Powell that inflation is sticky, and the tariffs and the conflict are putting things into question. The Fed is staying the course. They’re still going to work on their dual mandate of keeping the jobs market in place, or unemployment in a certain range, and getting inflation back down to 2%. So I wouldn’t expect much out of him, though the market, again, is really showing now that there’s no expectation of a cut until much later in the year.
Yeah, that leads me perfectly into my next question—really just the market reactions investors should anticipate, especially in bond yields, the US dollar, and some of the riskier assets. It sounds like they’re kind of pricing in a pause, at least for now.
Absolutely. And I’m actually surprised this morning that, given the PPI print, we didn’t see yields push even higher than they are. I would’ve expected to see the 10-year maybe back at 4.3 or so, where we were just last week. And when you talk about risk assets, I think we’re in this environment right now where historically, some of those risk assets would be what people want—gold and silver. That certainly reacted today. We are going to see higher rates as opposed to just kind of that safe haven trade, but again, that can change in a moment’s notice.
And it’s been a while—or it’s been going on for a while, I should say—the sort of “great decoupling,” right? Where US markets are really outperforming global indices in general. What structural advantages, like energy independence or AI leadership, are really driving this divergence for the US? And can this continue in the face of these rising geopolitical risks?
Yeah, you just hit it, right? It’s energy independence, which I’m not sure other countries maybe don’t have, but we definitely do. AI leadership as well. I think this can continue. But we’ve been talking about whether there’s an AI bubble—whether there’s too much spending on capital expenditures on AI. So far, it’s been okay, and the bubble talk is kind of on the back burner for right now. So once we get beyond this conflict—hopefully much, much sooner rather than later—let’s see if AI expenditures hold up. If we start getting next quarter guidance from some of the big companies—Meta, Amazon—that are still investing into AI, and if that continues, then yes, I believe we will remain at the top of the chain and this resilience will continue.
Great. And just real quick, any final thoughts for the week ahead?
We have a monthly expiration on Friday. There’s a lot of volume out there, a lot of option open interest, and we know when we get to these triple witching or quad witching events—whatever you want to call it, which we have this Friday—we can see some added volatility. So I would expect volatility to remain. But again, right now it’s not the Fed—it’s probably not even PPI anymore. It’s what’s going to happen later today, tomorrow, with the escalation that we’re seeing. So I think everybody just needs to keep on their toes and keep things a little bit closer to the vest.
Scott, thanks a lot for stopping by. For more from Scott, you can go to prospertrading.com or go onto our website, IBKR.com. Click on Education, look for podcasts, webinars, articles, and everything from Prosper Trading. And Scott, thanks a lot. Until next time, looking forward to talking with you.
Thank you, Jeff.
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