Key Takeaways
- Iran launched a drone attack on the Al-Azraq Air Base in Jordan, targeting U.S. fighter jets and escalating regional conflict.
- Fitch Ratings placed QatarEnergy and Qatar’s sovereign rating on Rating Watch Negative due to potential long-term disruptions in the Strait of Hormuz.
- U.S. 30-year mortgage rates climbed to 6.46%, the highest level since September 2025, as inflation fears resurge.
- ECB's Francois Villeroy signaled that the next move for interest rates is "highly likely" to be an increase to combat oil-driven inflation.
- Atlanta Fed GDPNow slashed its Q1 growth forecast to 1.64%, down from a previous estimate of 1.95%.
Geopolitical instability reached a new peak on Thursday as Iran’s Mehr news agency reported a drone strike on U.S. fighter jets stationed at the Al-Azraq Air Base in Jordan. The attack follows weeks of heightening tensions and has immediately impacted global energy markets and credit outlooks. In Iran, the Mobarakeh Steel Plant—one of the region's largest—reportedly halted production as the domestic industrial sector feels the strain of the ongoing conflict.
The credit implications of the war are spreading rapidly through the Middle East. Fitch Ratings (SPGI) has placed the 'AA' rating of QatarEnergy on Rating Watch Negative, citing the risk of a prolonged closure of the Strait of Hormuz. While Fitch noted that QatarEnergy maintains a conservative financial profile and solid liquidity, the agency warned that it could take years to restore LNG production capacity if infrastructure sustains significant damage during the war.
In the United States, the housing market is facing renewed pressure as borrowing costs surge. Freddie Mac (FMCC) reported that 30-year fixed-rate mortgages averaged 6.46% for the week ending April 2, up from 6.38% the previous week. Former President Donald Trump commented on the data, downplaying legislative reform and stating that the housing market's recovery is now "all about interest rates."
Monetary policymakers in Europe are also shifting to a more hawkish stance. ECB policymaker Francois Villeroy de Galhau stated that while it is too early to set a specific timetable, the next change in key interest rates is "highly likely" to be upwards. Villeroy noted that the ECB is closely watching household and firm price expectations, as rising oil prices push the Eurozone closer to an "adverse intermediate scenario" rather than its previous baseline.
Economic growth projections in the U.S. are simultaneously cooling. The Atlanta Fed’s GDPNow model reduced its Q1 GDP growth estimate to 1.64%, a significant drop from the 1.95% projected just days ago. This slowdown, combined with rising mortgage rates and energy-led inflation, suggests a darkening "stagflationary" outlook for the second quarter of 2026.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.