Laura Cooper 3.8 2 ideas

"We are seeing that disruption in oil flows be significant multiples of the disruption we saw back then... This is an environment where we are now unlikely in a higher for longer yield backdrop, because we do not see any near-term relief for yields to come down meaningfully." A sustained oil shock feeds directly into headline inflation. Central banks, bound by their mandates, cannot cut interest rates while inflation is accelerating, even if economic growth is slowing (stagflation). This forces the market to price out previously expected rate cuts, driving long-duration bond yields higher and prices lower. SHORT. Fixed income offers no protection in a supply-driven inflation shock; yields must rise to reflect the new inflation reality. The energy shock causes such a severe and immediate economic contraction that central banks are forced to abandon their inflation fight and cut rates to prevent a depression.

Trump is doubling down on tariffs and fiscal spending (tax cuts). Tariffs create uncertainty (leading to hedging into USD) and inflation (keeping yields higher). This "US Exceptionalism" in yields and safe-haven status supports the Dollar. LONG. A rapid pivot by the Fed to deep cuts if the labor market cracks.