🚨 THIS IS HOW STAGFLATION STARTS.
The U.S. is preparing potential ground operations in Iran, with a campaign horizon of several weeks to ~2 months.
A ground escalation in the Middle East immediately reprices energy risk, with the Strait of Hormuz, which handles ~20% of global oil flows, at the center of the equation.
If this escalates:
Oil spikes -> inflation re-accelerates globally
Supply chains tighten -> input costs surge
Central banks lose flexibility -> higher for longer gets locked in
Risk assets reprice -> equities and credit come under pressure
At the same time, war-driven uncertainty plus tighter financial conditions raise the odds of demand destruction or a policy mistake.
That is the worst-case macro mix:
Inflation up plus growth down -> stagflation dynamics -> rising recession probability.
Markets are not positioned for a sustained ground conflict.
If boots hit the ground, this does not stay regional. It forces a global repricing across energy, rates, and risk.
