Source: Fortune
Summary
Three weeks after President Trump stated that the war with Iran was “very complete,” the conflict has escalated, and oil prices have surged. Brent crude futures have climbed to $113, and West Texas Intermediate has risen to $101, causing gas prices to reach three-year highs. The war is widening, with Yemen’s Iran-backed Houthi rebels entering the conflict, and the Pentagon preparing for ground operations inside Iran. The International Energy Agency has released 400 million barrels from strategic reserves, but prices continue to climb. Wall Street is bracing for the inevitable second-order effects, with analysts forecasting “higher for longer” Brent prices and potential inflation shocks.
Our Reading
The numbers tell one story.
President Trump’s words have lost their market-moving power, as oil prices continue to surge despite his claims of a “very complete” war. The war is widening, and the consequences are slamming American consumers. Wall Street is bracing for the inevitable second-order effects, including potential inflation shocks. The Fed’s tools have “no meaningful effect on supply shocks,” leaving investors to face the music. The mix of stagflation is looking increasingly likely, with growth marked down and inflation marked up.
It’s a war of words, and the market is calling the shots.
Author: Evan Null
