You knew about oil prices, discussed in a previous post. Now attention is turning to the sharp rise of long-term interest rates. From Ian Smith, Sam Fleming, and Olaf Storbeck in the Financial Times:
Thanks America for the most idiotic war to date. Iran now controls the Straits, will make it a toll facility for ships crossing and reap the revenue, congrats to the new regional hegemon. Meanwhile the US faces strategic defeat, has dealt a terrible economic blow to poor countries which will result in people in dying needlessly. Keep up the Great Work!
The negative supply shock in oil is happening alongside a war spending driven expected positive supply shock in Treasuries. Agree in expectation that we’ll likely get more inflation than slowdown due to oil shock. Also agree with the consensus that Asian nations who import a very high percentage of their energy needs from the ME will be impacted more severely as rationing and other forms of demand response to higher prices kick in.
The expected supply increase in Treasuries is part of the recent selloff. As you and others point out, inflation curves look benign. Also the 2y -10y and 2y-30y spreads not really flashing much signal either. Will be interesting to see how Congress handles the expected request for $200b or more for Defense / War dept. and any new estimates around ongoing spending
Thanks America for the most idiotic war to date. Iran now controls the Straits, will make it a toll facility for ships crossing and reap the revenue, congrats to the new regional hegemon. Meanwhile the US faces strategic defeat, has dealt a terrible economic blow to poor countries which will result in people in dying needlessly. Keep up the Great Work!
Yeah, but something something wokeness something something deep state!
Wait and see what happens to a suicidal regime that was allowed and pasified for 47 years
The negative supply shock in oil is happening alongside a war spending driven expected positive supply shock in Treasuries. Agree in expectation that we’ll likely get more inflation than slowdown due to oil shock. Also agree with the consensus that Asian nations who import a very high percentage of their energy needs from the ME will be impacted more severely as rationing and other forms of demand response to higher prices kick in.
The expected supply increase in Treasuries is part of the recent selloff. As you and others point out, inflation curves look benign. Also the 2y -10y and 2y-30y spreads not really flashing much signal either. Will be interesting to see how Congress handles the expected request for $200b or more for Defense / War dept. and any new estimates around ongoing spending