Lee Yoon-soo

Gold and Bitcoin will rally once real interest rates reverse their recent spike and begin to decline. The bond market is currently overreacting to transient inflation, and the underlying macro points toward disinflation. As real rates fall, both gold and bitcoin will benefit.

Gold and Bitcoin will rally once real interest rates reverse their recent spike and begin to decline. The bond market is currently overreacting to transient inflation, and the underlying macro points toward disinflation. As real rates fall, both gold and bitcoin will benefit.

If oil prices spike and remain elevated for more than three months, it will drive up both headline and core CPI, embedding structural inflation. This would force the Federal Reserve to aggressively hike interest rates, leading to a plunge in bond prices and severe damage to growth stocks.

Wheat prices are up 40% in 2026 and will rise further if the Hormuz blockage disrupts fertilizer shipments during the autumn planting season for winter wheat. A missed fertilizer application destroys a full year's crop, directly threatening global food inflation.

Cushing crude oil inventories are near 2014 lows after an initial restocking rush; if the Hormuz blockade persists and another inventory build fails, a physical oil supply squeeze will spike WTI prices. The futures market has not yet fully priced this risk.

The bond market reacted to the July FOMC with a steepening of the yield curve, signaling disbelief in the Fed's 2% inflation target. Long-term factors—including de-globalization, demographic shifts, and massive AI infrastructure capex—are pulling money into the real economy instead of financial markets, causing a structural shift from the low-inflation regime of 1990–2020 to a persistently higher inflation regime. As a result, long-term US Treasury yields will continue to rise, and bonds have lost their safe-asset appeal. Experts now see fair CPI around 3-3.5% and corresponding long-term bond yields of 3.5–4.5%, with risk of overshoot on shocks.

The blockade of the Strait of Hormuz is severely disrupting the distribution of fertilizer, which is heavily exported from the Middle East. If fertilizer does not reach farmers in time for the winter wheat planting season, wheat yields will plummet, driving wheat prices significantly higher than their current 40% year-to-date increase.

If oil prices spike and remain elevated for more than three months, it will drive up both headline and core CPI, embedding structural inflation. This would force the Federal Reserve to aggressively hike interest rates, leading to a plunge in bond prices and severe damage to growth stocks.