Stocks and oil continued to move in opposite directions this week, reinforcing a macro backdrop where inflation, not growth, is the dominant driver of asset prices. As oil surged on supply concerns and Iranian war escalation, investors quickly recalibrated inflation expectations higher. That shift has pushed anticipated Federal Reserve rate cuts further into the back half of the year while simultaneously strengthening the U.S. dollar. In turn, tighter financial conditions are weighing on equities, particularly rate-sensitive sectors.
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