If energy disruptions pose less of a risk to jobs, the challenge for central banks shifts from managing stagflation risks to guarding against renewed price pressures.
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The 1970s oil-shock playbook needs an update: The inflation costs remain, but the employment risks appear far smaller than they did 50 years ago.
Why it matters: As the Iran war continues, there are early signs of renewed strength in the labor market.
Oil rally may fuel stagflation concerns, though AI remains market's key driver: Arnab Das
Commentary: Iran war has raised inflation risks. Why are Asian economies still growing?
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Employers Added 172,000 Jobs Last Month As U.S. Job Market Shows Resilience Despite Iran War
172,000 jobs added in May, showing market resilience despite Iran war
Over recent decades, the share of U.S. economic activity has increased in service industries that demand less energy.
Lingering disruptions to shipments of oil, fertilizer and other industrial inputs could keep inflation concerns alive at the Fed.
"Clearly, the longer that oil remains at these levels, expectations of a sustained shock will only grow," Deutsche Bank's Jim…
The war is pushing up energy prices and rattling markets, which central banks can't neutralize with an interest-rate tweak.
Some investors are drawing comparisons with the 1970s to interpret where markets are headed in 2026, but there are several key…
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