{"id":59683,"date":"2026-03-12T01:38:33","date_gmt":"2026-03-12T05:38:33","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-middle-east-escalation-rupee-hits-record-low-as-goldman-sachs-delays-fed-rate-cut-forecasts\/59683\/"},"modified":"2026-03-12T01:38:33","modified_gmt":"2026-03-12T05:38:33","slug":"global-markets-shaken-by-middle-east-escalation-rupee-hits-record-low-as-goldman-sachs-delays-fed-rate-cut-forecasts","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-shaken-by-middle-east-escalation-rupee-hits-record-low-as-goldman-sachs-delays-fed-rate-cut-forecasts\/59683\/","title":{"rendered":"Global Markets Shaken by Middle East Escalation: Rupee Hits Record Low as Goldman Sachs Delays Fed Rate Cut Forecasts"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>The Indian Rupee (INR) plunged to a historic low of 92.33 against the US Dollar<\/strong> as surging oil prices and Middle East tensions triggered a massive flight to safety.<\/li>\n<li><strong>Goldman Sachs (<a href=\"\/stock\/GS\">GS<\/a>) postponed its Federal Reserve rate cut forecast to September and December 2026<\/strong>, citing persistent inflation risks stemming from the regional conflict.<\/li>\n<li><strong>Partners Group (<a href=\"\/stock\/PGHN\">PGHN<\/a>) warned that private credit default rates could double<\/strong> over the next few years, driven by the &quot;downside of AI-driven economic disruption.&quot;<\/li>\n<li><strong>Iran granted passage to Indian oil tankers through the Strait of Hormuz<\/strong>, providing a critical reprieve as Indian exports and domestic hospitality sectors face severe disruptions.<\/li>\n<li><strong>Russia and the U.S. have initiated high-level discussions on the global energy crisis<\/strong>, with Russian envoy Kirill Dmitriev meeting U.S. counterparts to discuss reviving relations.<\/li>\n<\/ul>\n<h2>Currency and Central Bank Pivot<\/h2>\n<p>The <strong>Indian Rupee (<a href=\"\/stock\/INR\">INR<\/a>)<\/strong> hit an all-time low of <strong>92.33<\/strong> against the US Dollar this week, pressured by a <strong>25% surge in Brent crude prices<\/strong> which neared <strong>$95 per barrel<\/strong>. While the Reserve Bank of India (RBI) intervened by selling an estimated <strong>$18 billion to $20 billion<\/strong> to stabilize the currency, the rupee remains highly sensitive to the escalating U.S.-Israeli campaign against Iran.<\/p>\n<p>In response to these inflationary pressures, Goldman Sachs (<a href=\"\/stock\/GS\">GS<\/a>) has significantly revised its outlook for the U.S. Federal Reserve. The bank now expects <strong>25 basis point rate cuts<\/strong> to occur only in <strong>September and December 2026<\/strong>, abandoning its previous forecast of a June start. <em>Analysts suggest that higher energy costs have made a summer rate cut &quot;too early&quot; under current conditions.<\/em><\/p>\n<h2>Middle East Conflict and Trade Disruptions<\/h2>\n<p>The ongoing war is weighing heavily on <strong>Gulf Cooperation Council (GCC)<\/strong> debt capital market (DCM) activity. Fitch Ratings noted that while regional fundamentals remain strong, the conflict has slowed issuance. However, a major breakthrough occurred as the <strong>Iranian Foreign Minister<\/strong> announced that Indian oil tankers have been given permission to pass through the <strong>Strait of Hormuz<\/strong>, a move intended to secure energy supplies for the subcontinent.<\/p>\n<p>Despite this, the &quot;fallout&quot; from the Iran conflict is battering Indian trade. Approximately <strong>400,000 metric tonnes of basmati rice<\/strong> are currently stuck at ports or in transit, while domestic Indian restaurants and hotels are warning of <strong>imminent shutdowns<\/strong> due to a severe scarcity of commercial cooking gas (LPG). <em>The National Restaurant Association of India (NRAI) warned that up to 30% of small eateries could face permanent closure if supply chains remain paralyzed.<\/em><\/p>\n<h2>Private Credit and Corporate Risks<\/h2>\n<p>Partners Group (<a href=\"\/stock\/PGHN\">PGHN<\/a>) Chair Steffen Meister issued a stark warning regarding the private credit market, stating that <strong>default rates could double<\/strong> in the coming years. Meister highlighted that lenders are facing the &quot;full downside&quot; of AI-driven economic disruption while capturing only limited upside. This warning comes as major EU economies, according to the Financial Times, are seeking <strong>stronger oversight of the Single Market<\/strong> to navigate the current period of economic volatility.<\/p>\n<h2>Geopolitical Shifts and Global Macro<\/h2>\n<p>In a surprising diplomatic development, Russian envoy <strong>Kirill Dmitriev<\/strong> reported discussing initiatives to revive <strong>US-Russia relations<\/strong> during meetings with U.S. counterparts in Florida. The discussions focused heavily on the <strong>global energy crisis<\/strong>, with Dmitriev noting that the U.S. is beginning to recognize the &quot;systemically important role&quot; of Russian energy in maintaining global stability.<\/p>\n<p>Elsewhere, <strong>South Korea&#39;s Lee<\/strong> has requested immediate work on a <strong>supplemental budget<\/strong> to combat domestic economic headwinds. In Europe, <strong>Sweden&#39;s PES unemployment rate<\/strong> showed a slight improvement, falling to <strong>3.7% in February<\/strong> from 3.8% previously. Meanwhile, security tensions remain high in the Levant after a <strong>rocket hit an unpopulated area in Israel<\/strong>, though the U.S. Embassy in Muscat has ended its shelter-in-place guidance for Oman.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways The Indian Rupee (INR) plunged to a historic low of 92.33 against the US Dollar as surging oil 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