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Source: Bloomberg Finance L.P., as of March 31, 2026. Market implied inflation expectations shown using 1-year and 5-year inflation swaps. <br />For the Quarter Ended March 31, 2026 <br />Market Update <br />▸Closure of the Strait of Hormuz creates a <br />supply shock <br />▹Higher oil prices pressure agricultural <br />and industrial inputs <br />▹Duration of price shock more important <br />than magnitude <br />▸Federal Reserve likely to remain on hold as <br />it assesses evolving risks <br />▹Headline inflation expected to rise <br />though uncertainty remains regarding <br />passthrough to core inflation and labor <br />markets <br />▹Fed to look through supply-side energy <br />shock if inflation expectations remain <br />anchored <br />44% <br />61% <br />55% <br />34%32% <br />0% <br />25% <br />50% <br />75% <br />Brent Crude <br />$96.79 <br />Nat. Gas (Eur) <br />€55.28 <br />Urea Ammonia Polyethylene <br />Price Change of Energy Commodities* <br />Since February 27 <br />3.2% <br />2% <br />3% <br />4% <br />Jan-25 Apr-25 Jul-25 Oct-25 Jan-26HundredsForward Inflation Expectations <br />January 1, 2025 to March 31, 2026 <br />1-year 5-year <br />*Brent Crude are quoted in dollars per barrel based on the front -month futures contract. Natural gas <br />prices are quoted in euros per megawatt-hour. Ammonia, and urea prices are based on the front -month <br />exchange-traded futures contract. Polyethylene is price are based on the active exchange -traded <br />futures contract. <br />Market Pricing Conflict In Iran <br />CITY OF REDWOOD CITY <br />PFM Asset Management | pfmam.com 12 <br />7.C. - Page 18 of 71 <br />34