00:00Iran is not Venezuela. It's not going to be sort of sweet-talked into doing a deal with the United
00:04States. At the same time, some kind of off-ramp might appear. In that case, are we back to a
00:10situation where the markets start pricing in two Fed rate cuts again this year? I think so. I think
00:15if you see a very rapid de-escalation, if the energy markets, for example, or some of these
00:21other markets are correct in thinking that this is a relatively intense but short-lived event,
00:29then I think, yes, I think you will go back to a world where, in general, without this energy
00:34price impulse, actually inflation was trending down in many parts of the world. The U.S. is one of
00:41those, but it's really a broader phenomenon across other DM and EM parts of the market. And I think
00:46in that sort of eventuality, yes, I think two cuts by the Fed, perhaps back-loaded into the second
00:51half of the year, seem like the right baseline scenario. Is it binary? I mean, do we either go
00:56up substantially from here on oil prices or go down substantially? Because it seems to me that $75
01:01on a barrel of WTI is not the end of the world, even for inflation. But something a lot higher
01:07would be and something a lot lower would be back to where we were. I think something a lot lower
01:11would definitely be back to where we were. Again, I think it depends a little bit on, you know,
01:15how the physical disruptions ease, right? Like whether you see a kind of end to this most intense
01:20phase, whether you start to seeing the physical supply start to move out of that region into the rest of
01:24the world. I think that's the key, right? Like I think, you know, if this starts to last beyond
01:29three, four, five weeks, I think we are not, the markets are not quite priced for that.
Comments