While stock and bond markets are closed - money never sleeps. I was asked my opinion on Fed Policy, Oil and the Iran Conflict. Let's dive in!
Fed Policy - The Fed should take the rest of the year off—and I think they will. While the market is pricing in some cuts later this year, Powell was very clear that he has to see size of the effects on tariffs before making a move. Don't fear! The current narrative is Treasury Secretary Bessent will take over next may with a quick path to cuts. A host asked if I thought the market could hold out by then. I said it all depends on the hard data, not sentiment.
OIL - Yes, oil spiked on the Iran conflict, but it’s right back to where it was in January! We’re at the high end of the normal range we had before the “Liberation Day” selloff. This isn’t a breakout. It’s a reset. We should be watching for demand destruction or surprise OPEC moves before we overreact.
Iran - Bottom line: a safer world is a more investable world. Two things can be true at once: many Americans are deeply troubled by the broader conflict in the region, but there is near-universal support for how Iran was handled by Israel by major European countries. The U.S. standing firm behind the actions and providing military support shows strength, and markets love certainty. I'm surprised that markets hav held up so well.