Tracy Chen 5.0 3 ideas

We need to position our portfolio to be more constructive on commodity, especially LatAm. The closure of the Strait of Hormuz is causing a broad-based commodity shock that extends beyond just oil to LNG and fertilizers. This prolonged supply constraint will keep energy and raw material prices elevated, directly benefiting broad commodity indices and oil-tracking funds. LONG. A rapid diplomatic resolution to the Middle East conflict or a severe global recession that destroys commodity demand.

I don't think they should cut, actually. I think the inflation probably will be stickier going forward, because it's not just oil. The market is waking up to a stagflationary environment driven by geopolitical supply shocks. As the Fed is forced to hold rates higher for longer to combat sticky inflation, the yield curve will continue to bear-flatten, causing long-duration US Treasuries to lose value. SHORT. A sudden credit event or banking crisis forces the Fed into emergency rate cuts, sparking a massive rally in long-dated bonds.