The "TACO" crowd keeps expecting geopolitical de-escalation because escalation feels too costly. The article's key point is straightforward: trade pressure, shipping risk, and oil risk are now interacting, not occurring in isolation. If Brent keeps threatening triple digits while tariff uncertainty stays elevated, central banks get boxed in. Growth slows, headline inflation stays sticky, and the easy-rate-cut fantasy dies quickly.
It is interesting to consider a future where $200 oil spikes inflation at the same moment AI is causing massive deflation. The CPI basket already diverges across categories of real world vs digital world costs, with the former hyperinflating and the latter deflating despite massive money printing. We could see a world later this year where headline CPI looks tame but double clicking on it reveals a $24 cheeseburger and a $3 Netflix subscription.