Iran clashes fueling oil and inflation — ride the energy rally
Rising tensions between the US and Iran are pushing oil prices higher for the third day in a row. At the same time, the Federal Reserve reported that inflation is picking up across the US, largely due to rising energy costs.
Idea
Fresh military clashes between the US and Iran are directly disrupting global oil supply routes, pushing oil prices steadily upward. This geopolitical tension is also causing broader inflation, which the Fed just confirmed in their latest report. When energy prices drive up inflation in a strong employment environment, oil stocks tend to gain even more because investors use them as a shield against rising prices. Because this is an ongoing conflict rather than a one-time event, the upward pressure on oil could persist as long as peace talks remain stalled.