Great stuff as always! As you mentioned commodities like oil and ags are rallying recently. I can personally see a situation where this worsens if Russia escalates their attacks around the black sea. Causing food prices to go up and as you mentioned driving up headline inflation. And with inflation rising in this scenario I could see real wages go down but the labor market still staying rather strong. (Assuming no credit crunch) So I think the market isn’t pricing in this tail risk.
Great stuff as always! As you mentioned commodities like oil and ags are rallying recently. I can personally see a situation where this worsens if Russia escalates their attacks around the black sea. Causing food prices to go up and as you mentioned driving up headline inflation. And with inflation rising in this scenario I could see real wages go down but the labor market still staying rather strong. (Assuming no credit crunch) So I think the market isn’t pricing in this tail risk.
100%