Hot is the new normal

The U.S. published its monthly inflation data yesterday, just a week before the June FOMC meeting which will be the first one for the new chairman of the Fed, Kevin Warsh. The top chart below is worth more than a thousand words: the economy is running hot. The main reason is the energy supply shock provoked by the Iran conflict and the closure of the strait of Hormuz. And if you look at the bottom chart, which shows the global strategic oil reserves, you can see that the “fun” Is about to start in a few weeks of ther is no solution to the conflict. Since Iran allegedly attacked a helicopter in Hormuz, the U.S. has been aggressively bombing Iran overnight as President Trump is pushing hard for the signature of the peace deal. Not clear if he will succeed and what are the short term consequences of an escalation. What is clear is that as we stand, hot is the new normal, and inflation will be well above the stable prices threshold for a while.

Want to know more? You can register for free at Fund@mental.

#iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation