JPM's Michele: See Growth Slowdown, But Not Recession Amid $100 Oil

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JPMorgan 9.0
Investment Bank $3170.00B
Bob Michele 9.0

JPM's Michele: See Growth Slowdown, But Not Recession Amid $100 Oil

$100 Oil

wti

Even ourselves with a hundred dollar oil... you're going to write to a hundred and hang you out there. The analysis is conducted with $100 oil as the baseline, indicating it is the current/persistent price. The discussion of demand destruction at $120-$150 suggests the current move up has already occurred and is sustained, not necessarily forecasting a further sharp near-term rise from current levels.

3/16/2026 6:26:04 PM	short term cautious up	6 days later	-8.40%	-4.20%
3/4/2026 8:50:44 AM	short term up	5 days later	+3.01%	+3.01%
3/3/2026 2:24:23 PM	short term sharp up	5 days later	+26.94%	+40.40%
3/3/2026 11:01:30 AM	short term up	5 days later	+26.94%	+26.94%

Asks when higher real yields start to impact the US economy and industry.

speaker1
Bob Michele

Argues the impact is happening now, citing the recent shift from expecting Fed rate cuts to higher costs for consumers and businesses.
Asks how the Fed can react to this situation.

speaker3
Bob Michele

States there's no obvious solution at these levels. With $100 oil, JPMorgan sees growth slowing significantly and inflation rising, forcing the Fed to wait and see what breaks first: the labor market or persistent inflation.
Cites Rosenberg Research noting no equity panic despite high VIX, and asks how to measure panic in bonds versus equities.

speaker1
Bob Michele

Notes bond market volatility has been muted, making it a surprisingly orderly sell-off. Attributes market confidence to the belief the administration will find a political 'off-ramp' due to midterm elections and Middle East pressures.
Notes the US is a net oil exporter but highlights global exposure to Middle East oil, questioning how other central banks will react.

speaker3
Bob Michele

Finds the oil price surge to $100 puzzling given the initial Strait of Hormuz risk premium. Sees demand destruction likely at $120-$150. Contrasts the Fed's dual mandate with the ECB/BoE's single inflation mandate, expecting hawkish talk and rate hikes from them due to soaring headline inflation.
Asks about the cultural concept of 'Persian patience' in the Iran conflict, and if Iran will be patient.

speaker1
Bob Michele

Agrees, stating Iran has little else to do but can control global oil supply via the Strait of Hormuz with drones. This is the market's growing concern: the US may want an off-ramp, but Iran doesn't need to provide one.

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