The Illusion of Certainty: War, Rates, and the "Divine Guidance" of Market Cycles

The market hates a vacuum, and right now, Washington and the Middle East are providing plenty of them. In 50 years of analyzing these cycles, I’ve learned that when the headlines get this loud, the smart money looks at the "plumbing."

1. The "Fog of War" & Policy Paralysis Yesterday’s Senate vote to block the War Powers Resolution on Iran (47-53) confirms a "Free Rein" era for executive military action. While D.C. debates the "Epic Fury" operations, the DHS is facing a funding lapse, and Secretary Kristi Noem has been shown the door. For investors, this is Systemic Risk. When government stability wobbles, the "Peace Dividend" evaporates, making domestic, esoteric assets (like our Redwood Carbon play) far more attractive than global volatility.

2. The FED’s Hawkish Tilt: Why "Cheap Money" Isn't Coming Back Inflation is stubbornly pegged at 2.9%, and with war-driven energy costs rising, the FED’s "stabilization" talk is shifting back toward a hawkish stance. We aren't looking at a return to "cheap money"; we are looking at a permanent reset of the cost of capital.

Metric	March 2026 Snapshot	Strategic Impact
Fed Funds Rate	3.5% – 3.75%	Higher for longer; debt-heavy deals are being repriced.
Commercial Cap Rates	6.5% – 8.5%	Expansion is here. We are buying at 1990s-style value points.
10-Year Treasury	3.95% - 4.7% (Volatile)	The new "Floor." Risk-free yield is a high bar to clear.

3. Real Estate: The Great Bifurcation We are seeing a tale of two markets. While residential prices are stalling as the "Rate Ceiling" hits, the commercial sector is in a "Reset." Assets are being priced below replacement cost—but only for those who understand how to hedge with "Alpha" drivers like carbon sequestration.

The Bottom Line: Divine Guidance Whether it’s the 41% jump in our recent engagement or the gut feeling that tells you when a cycle has turned, I believe there is Divine Guidance in these shifts. We are being led away from legacy complexity toward a more transparent, "on-chain" financial world. In a hawkish world, yield is earned through asset selection and a bit of faith.

Stay grounded.

Gary McKae Senior Investment Strategist | McKae Capital Management, DRE 01452438, CRD# 328508