Markets Have Pre-Priced Effect of Higher Oil Price

Since the outbreak of war with Iran in late February, spiking oil prices have spurred broad-based fears of inflation possibly resurging. We have long argued, however, that absent rapid money supply growth to drive prices broadly higher economywide, elevated oil and gas prices are much more likely to cause substitution. For discretionary items—especially some of life’s luxuries—consumers are likelier to delay, defer or downsize consumption. Read Full Article »