GlobalData TS Lombard: Perkins Vs Beamish Why the Fed Hates Trump
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Jun 17, 2025 Geopolitical tensions in the Middle East are stirring worries about oil prices and market stability. The discussion delves into China's oil dependence and Iran's nuclear ambitions, highlighting complicated international negotiations. The Fed's cautious approach to inflation amidst political strife raises questions about their next moves. Meanwhile, rising yields in Japan's bond markets could shake global economies. The debate on Quantitative Tightening adds another layer of complexity to financial predictions. Buckle up for a wild ride through today's economic landscape!
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Middle East Conflict and Oil Prices
- The Middle East conflict mainly impacts oil prices, but current increases won't cause a recession fear.
- Investors should watch if Iran blocks oil shipments or if Israel targets Iranian oil production, which could disrupt supply.
Shock Repetition Shapes Market Expectations
- Markets gradually adjust expectations after repeated shocks, leading to higher inflation volatility pricing.
- Current conditions differ from the 1970s as wage-inflation spirals are absent due to weaker labor power.
Fed’s Cautious Rate Cut Approach
- The Fed won't cut rates soon despite no tariff inflation showing in CPI yet.
- They remain cautious, watching for delayed inflation effects or margin squeezes before pivoting on rates.