Michael Every: Economic Statecraft Changed Everything, Old Playbook Is Dead, New Era Begins

Summary

Rabobank strategist Michael Every lays out a framework in which geopolitics and economic statecraft override traditional monetary and fiscal policy, arguing that central bank models are broken, interest rates will rise structurally, defense stocks will face profit caps, and renewed Iran conflict will keep oil prices elevated.

• Global architecture is fragmenting; national security now drives economic policy.
• Central bank one-rate tools cannot accommodate sectoral priorities in a new statecraft era.
• Massive defense, reshoring, and infrastructure spending will push long-term bond yields higher.
• Defense sector profits will be constrained as governments prioritize output over shareholder returns.
• Michael Every predicts Iran war will resume after US midterms, with Strait of Hormuz disruptions returning.
• More oil flows reduce Iran’s leverage, prompting them to rock the boat and disrupt supply.
• Oil prices are expected to remain structurally higher as trust in key chokepoints erodes.
• US can retain primacy through economic restructuring, but the process will involve painful changes.