Market impact of Iran conflict and central bank dilemma (with Francine Lacqua)

Yields up , short term, interviewee explicit

explicit

NDX

RUT

Oil up , medium term, interviewee explicit

explicit

Metals

USD

Principal 6.0
Asset Manager $880.00B
Seema Shah 8.5

Market impact of Iran conflict and central bank dilemma (with Francine Lacqua)

wti

Oil could reach $150-$200 a barrel if there is a multi-quarter stoppage of the Strait of Hormuz. Conflict is prolonged, Strait closure disrupts supply for months, and broader commodity impacts (fertilizer, sulfur) will amplify the shock.

3 calls

+28

reliable positive edge across multiple calls

3/20/2026 12:21:30 AM	medium term cautious up	21 days later	+12.42%	+6.21%

yields

The Bank of England has shifted from expecting cuts to expecting hikes... there's likely to be hikes across the board at the Bank of England. Supply-shock inflation from the conflict forces central banks to tighten policy despite the growth risks.

7 calls

+2

no reliable edge (random outcomes)

12/9/2025 3:11:11 PM	medium term cautious down	20 days later	-0.82%	+0.41%
9/11/2025 2:16:17 PM	short term cautious down	5 days later	+0.37%	-0.18%
9/9/2025 2:41:59 PM	short term down	5 days later	+0.05%	-0.05%
8/26/2025 2:40:28 AM	medium term cautious down	20 days later	-5.00%	+2.50%
8/26/2025 2:40:28 AM	medium term cautious down	20 days later	-5.00%	+2.50%
8/4/2025 1:05:57 PM	medium term cautious down	20 days later	+1.88%	-0.94%

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Seema Shah

Markets continue to sell off because they are concerned about when the conflict will end, how far oil prices will move, and what comes next.

Even after a significant sell-off on Friday, the decline continued into Monday, indicating deep market anxiety.
Seema Shah

We need to reach a peak point where markets fully confront the risk of a prolonged conflict and the fact that reopening the Strait of Hormuz will take months to normalize oil and commodity flows.

Central bank expectations have already moved to hikes, but there is probably more to go as the shock is absorbed.
Seema Shah

Oil could reach $150-$200 a barrel if there is a multi-quarter stoppage of the Strait of Hormuz.

The next stage is thinking about impacts beyond oil, such as fertilizer and sulfur, which will have broader supply chain effects.
Seema Shah

The Bank of England has shifted from expecting cuts to expecting hikes due to inflation concerns, and this is hitting the front end of the gilt market.

The US has been above target for five years, but the Bank of England has been particularly worried about sticky inflation.
Seema Shah

This supply shock is the worst nightmare for central banks, forcing a dilemma. Likely outcome is hikes first, then potential cuts in 2026 as demand weakens.

This represents a big turnaround from what investors were expecting for 2024.
Seema Shah

High gasoline prices could cancel out the benefit of fiscal stimulus for the US consumer, recalling that $4/gallon gasoline in 2008 accelerated the US recession.

The US has fiscal stimulus in play, making it different from Europe, but the consumer is still vulnerable.
Seema Shah

A worst-case scenario of a multi-quarter Strait closure and oil above $125/barrel could trigger a global recession, with Asia being the most vulnerable region (China excepted).

The US is the least vulnerable, but the Asia story is key to determining a global negative outcome.

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