Everyone's watching the Strait of Hormuz and yeah, energy supply risk is real. But markets price the obvious fast.
What's actually moving under the radar right now is the stagflation narrative. Not as a hot take, as a measurable shift in sentiment. While most fear narratives have cooled this week, stagflation has quietly made one of the bigger jumps.
The setup isn't complicated. Tariff pressure on costs + softening growth = not great for anyone positioned around a clean Fed pivot. And fed_pivot sentiment has barely budged, which tells you the market hasn't really reconciled this yet.
Stagflation doesn't need to show up in a CPI print to matter. It just needs to be believed. By the time consensus catches up, the rotation's usually already done.
Watching commodities, TIPS, anything with real pricing power. Less enthusiastic about long duration here.
Not advice, just where my head's at.
While everyone is focussing on the strait, watch out for the Stagflation narrative
byu/thewatcher_v2 ininvesting
Posted by thewatcher_v2
4 Comments
Already priced in, new ath tomorrow
You can see the damage from this in the bond market, both international and US. Stock are divorced from this for the time being, as they rallied more than bonds have. Hence why I’ve sold a good amount and sit back in money market
Stagflation will only hurt the poors.
Inflation rise has to end to really set in stagflation lol