Immovable Economy Thwarts Irresistible Geo-Risk
The US digs in against rising Mideast tensions, but oil could ride them all the way to the election. Meanwhile, Trump gains in prediction markets.
Iran’s critical Kharg Island oil terminal.
Photographer: Anadolu/Getty Images
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Markets are offering stark contradictions, which could soon be resolved — for better or worse — in the Middle East. In bonds, the ripples from last week’s startlingly strong employment numbers (and China’s stimulus) were clear to see. Selling of two-year Treasuries, sensitive to short-term rates, was so aggressive that their yields briefly exceeded those of the 10-year. In other words, the dreaded inverted yield curve was back, scarcely a month after it appeared to have disinverted for good: