The Narrative in Markets Is Changing (24 Jun 2026) | The Daily Spark by Torsten Slok | Apollo
Apollo: The narrative in markets is changing from “lower oil prices mean lowerinflation” to “lower oil prices mean more demand in an already overheating economy, which means higherinflation.”
This breakdown in the correlation between rates and oil prices can be seen in the chart.
Driven by the strong April CPI, hot May non-farm payrolls and a hawkish Fed, the market narrative now suggests that the reopening of the Strait of Hormuz will further overheat the economy, forcing the Fed to raise interest rates soon.
References
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