The Inflation Regime That Doesnt Fade

The closure of the Strait of Hormuz has triggered a global energy-driven stagflation shock, though cooling labor markets may limit broad-based persistence.

Key Takeaways

• 1.The closure of the Strait of Hormuz is creating the building blocks of a global stagflationary shock.
• 2.Energy price spikes are hitting upstream production chains (chemicals, base metals), but downstream pass-through is currently more muted than the 2021-22 surge.
• 3.Weak demand and cooling labor markets in advanced economies may prevent a sustained second-round inflation spiral.

Table of Contents

• Market comment
• Day ahead
• FX Strategy
• Fixed Income Strategy
• Agri Commodity Markets
• Energy Markets
• Client coverage

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