Oil Tankers Stall, Fed Sees Inflation: What the Iran War Costs You

The interim accord is officially toast. Trump declared it "over" after Iranian strikes on US military targets in the Gulf, and now the Fed is sitting with a flaming bag on its doorstep. A new Fed report cited "stepped-up" inflation driven by tariffs, the Iran war, and AI buildout as three compounding forces that are doing the Fed's job in reverse. Bloomberg Economics expects the Fed on hold through year-end, arguing inflation here is idiosyncratic, not wage-driven. That word is doing a lot of heavy lifting right now.

Meanwhile, oil tanker traffic through the Strait of Hormuz is at a near standstill. The Bank of Japan flagged growing inflation pressures from the conflict. The ECB is reportedly "back to square one." And the EU is already drafting an electrification plan to reduce oil dependence. The whole world is repricing energy risk simultaneously, and Fundstrat's Tom Lee is out here calling it a buying opportunity, pointing to the V-shaped recovery from the February-April escalation.

Tom Lee might be right historically, but history also didn't have a $39 trillion debt tab and $3 billion per day in interest payments complicating the Fed's every move. The market is calm. The news is not. One of those is wrong.