Comments based on information available as of 5:15 am CT on 6/26/2026
Growth: A Roundtrip for Crude
Brent crude, a global benchmark for oil prices, has essentially roundtripped, sliding back toward the mid $70s to sit right around where it was before the conflict in the Middle East erupted at the end of February. Make no mistake, the massive price spike did real damage to consumer wallets in the interim, but those elevated energy costs always looked like a “for now” problem rather than a “forever” structural shift. For months, we saw household spending growth outpace income growth. That wasn’t a symptom of inherently weak wages, but rather the mathematical reality of families being forced to shell out significantly more just to fill their gas tanks. With the conflict premium unwinding and prices at the pump normalizing, the American consumer should get a much-needed reset, giving the broader economic expansion a much firmer foundation.
Inflation: The Worst Is Behind Us
If you are looking for a silver lining in the data, it is that the most painful bouts of inflation appear to be in the rearview mirror. With the peak in energy prices now behind us, headline inflation has the room it needs to fall. That is not to say price pressures have vanished entirely. We are still seeing inflationary currents in the tech sector, where supply constraints in chips and memory are pushing up the cost of hardware. But context matters, because consumers experience inflation psychologically as much as financially. You buy gas every week while staring at a giant illuminated price sign on the corner, but you only upgrade a laptop or smartphone every few years. Higher gadget prices simply do not weigh on the consumer psyche with the same crushing weight as expensive gasoline. With relief at the pump, the broader inflation narrative is finally turning a corner.
Policy: Ships Are Sailing
The diplomatic negotiations, ceasefire talks, and the future governance of the Strait of Hormuz remain incredibly complex issues for the international community to untangle. But for investors and the markets, the most critical data point right now isn’t the political maneuvering—it is the marine traffic. Tankers are transiting the waterway. Middle Eastern barrels are flowing back into the global market and supply disruptions are unwinding faster than most observers expected even two weeks ago. The geopolitical risk premium is fading because, at the end of the day, the ships are sailing through Strait and that’s what matters most for markets.
Looking Ahead: Oil Overheating
With crude prices tumbling back toward pre-conflict levels on the heels of normalizing supply, an interesting and somewhat baffling narrative has started to emerge. You are now hearing arguments that lower oil prices are somehow going to be inflationary because they will act as a tax cut, causing consumers to spend more, making the economy run too hot, and forcing the Fed to hike rates multiple times. Think about that for a second. We just spent months hearing that high oil prices were inflationary because they drive up the cost of transporting and producing everything. Now we are supposed to believe that low oil prices are also inflationary? They can’t have it both ways. Falling energy prices won’t be a reason for the Fed to turn more hawkish. The drop in oil is simply a relief valve for households, not a trigger for runaway economic overheating.
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