Adam Kobeissi(@TKL_Adam):Our models now suggest that US CPI inflation will rise to ~3.7% if current oil prices are sustained for just 7 more weeks, or until the end of May 2026. The wild card tonight will be if Iran decides to close the Bab al-Mandab Strait in the Red Sea, which accounts for 6-8 million barrels of daily oil supply. Markets are currently not pricing-in a closure, according to our analysis. The world is now facing its biggest energy crisis in history and further escalation will put the Fed in a "lose-lose" situation, where they must pick between unemployment and inflation. If Bab al-Mandab is closed, US inflation has a real possibility to exceed 4.0%.

2026.04.07 14:54

Our models now suggest that US CPI inflation will rise to ~3.7% if current oil prices are sustained for just 7 more weeks, or until the end of May 2026. The wild card tonight will be if Iran decides to close the Bab al-Mandab Strait in the Red Sea, which accounts for 6-8 million barrels of daily oil supply. Markets are currently not pricing-in a closure, according to our analysis. The world is now facing its biggest energy crisis in history and further escalation will put the Fed in a "lose-lose" situation, where they must pick between unemployment and inflation. If Bab al-Mandab is closed, US inflation has a real possibility to exceed 4.0%.

The Kobeissi Letter@KobeissiLetter

2026.04.07 14:40

BREAKING: US oil prices surge above $117/barrel as President Trump's 8 PM ET deadline approaches. Our models now suggest US CPI inflation will rise to 3.7% if current prices are sustained for ~7 more weeks.