The President's decision to restart the war with Iran has triggered renewed oil shock dynamics, sending oil prices surging and causing bonds and stocks to fall. This implies markets should brace for higher near-term inflation, a potential tightening of monetary policy, and a broad risk-off move across equities and fixed income.
•The President chose to restart the war with Iran, a clear policy escalation with immediate commodity market consequences.
•Surging oil prices following the announcement drove concurrent declines in both bonds and stocks, reflecting stagflationary fears.