Donald Trump says rising economic costs will not force a deal with Iran to reopen the Strait of Hormuz. Nigel Green of deVere Group argues that triple-digit oil quickly changes economic conditions and that no administration can absorb a prolonged energy shock without economic and political consequences. Brent crude remains volatile due to fears of disruption along the Strait of Hormuz, which carries about a fifth of global petroleum liquids consumption. Oil prices have repeatedly exceeded $100 a barrel, while US gasoline prices have risen since the war in Iran began earlier this year. Treasury yields have climbed, reflecting inflation anxiety, with the 10-year yield reaching about 4.67% and the 30-year yield moving above 5%. Investors are beginning to price broader consequences of sustained energy disruption.
""Triple-digit oil changes the macro picture very quickly," says Nigel Green. "No administration can absorb a prolonged energy shock without eventually facing economic and political consequences. "The idea the US economy can indefinitely power through sustained $100-plus oil without pressure building across markets and households is unrealistic.""
""Energy shocks feed directly into inflation ex""
"Brent crude remains volatile amid fears over disruption to the Strait of Hormuz, through which roughly a fifth of global petroleum liquids consumption moves."
"The benchmark 10-year US Treasury yield climbed as high as 4.67% earlier this month before easing back toward 4.5%, while the 30-year yield moved above 5% as investors reassessed the inflation risks tied to prolonged energy disruption."
Read at London Business News | Londonlovesbusiness.com
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