#geopolitical-events

#geopolitical-events

The CPI data due this month will be the first hard measure of American consumer prices since the Strait of Hormuz became a conflict zone, and every early signal points to a number that will shock people who stopped paying attention to energy transmission mechanisms after 2022.

The pricing of 10-year inflation-protected Treasuries implies inflation of 2.34% over the next decade, up only slightly from 2.25% pre-war. In other words, only about a fifth of the rise in the 10-year yield this month is accounted for by investors anticipating higher inflation.

They allow you to make money directly on real-world events in a way that has not been done before. Lockhart believes that the prediction markets are using real-world events—from the words President Donald Trump might say in his State of the Union speech to the time and date of when the attacks on Iran would take place—as little more than a 'marketing strategy.'

"If it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later, but I wouldn't want to point to a particular meeting."

European stock markets are opening in the red, with London’s FTSE 100 down by 0.5% and Germany’s DAX dropping nearly 1% amid geopolitical tensions.

The near collapse of the US$29tn market in government debt threatens the stability of the American financial system, showcasing the fragility of reliance on US debt.