Key insights
- The author highlights a growing stagflation narrative driven by tariff pressures and softening growth, which could negatively impact assets positioned for a Fed pivot. The market may be underestimating this risk. The author is watching commodities and TIPS for real pricing power and is less enthusiastic about long-duration assets.
Everyone's watching the Strait of Hormuz and yeah, energy supply risk is real. But markets price the obvious fast.
What's actually moving under the radar right now is the stagflation narrative. Not as a hot take, as a measurable shift in sentiment. While most fear narratives have cooled this week, stagflation has quietly made one of the bigger jumps.
The setup isn't complicated. Tariff pressure on costs + softening growth = not great for anyone positioned around a clean Fed pivot. And fed_pivot sentiment has barely budged, which tells you the market hasn't really reconciled this yet.
Stagflation doesn't need to show up in a CPI print to matter. It just needs to be believed. By the time consensus catches up, the rotation's usually already done.
Watching commodities, TIPS, anything with real pricing power. Less enthusiastic about long duration here.
Not advice, just where my head's at.