Episode 74: War in Middle East; Oil Price Shock; Inflation and Interest Rates

10 snips

Mar 9, 2026

They dissect recent Middle East military strikes and the market’s initial calm before rising volatility. They explore oil and LNG surges and the risk of a supply-driven inflation shock. They debate persistent global inflation, central bank missteps, and why rates may need to climb higher. They outline macro themes like AI capex, fiscal largesse, and the investment case for liquidity and high-quality bonds.

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ANECDOTE

Market Calm Turned To Oil Price Shock After Strikes

The hosts describe recent US and Israeli strikes on Iran and initial market calm followed by rising oil-price fear.
Christopher Joye notes markets were sanguine then oil moved past $100/barrel, sparking supply-side inflation concerns.

INSIGHT

Australia's Inflation Is Structural Not Transitory

Australia faces a persistent inflation problem driven by fiscal largesse and years of excessively easy monetary policy.
Christopher Joye points to monthly trimmed-mean prints and unit labour cost growth 1.5x pre-pandemic trend as evidence of sticky inflation.

INSIGHT

RBA Neutral Rate Revision Undermines Its Tightening

The RBA has likely misjudged the neutral rate and underpriced restrictiveness of policy, implying current rates won't curb inflation.
Joye notes the neutral cash rate revision from 3.1% to 3.6% and that 3.85% is unlikely to move the inflation dial much.

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Welcome to the Complexity Premia podcast by Coolabah Capital, a hosted by Christopher Joye, Chief Investment Officer and Portfolio Manager at Coolabah Capital, and Ying Yi, a Senior Portfolio Management Director at Coolabah Capital. The Complexity Premia podcast strives to deconstruct modern investment problems for wholesale (not retail) participants in capital markets. You can listen on your favourite podcast app, or you can find it on Spotify, Podbean or Apple Podcasts.

Chris and Ying Yi challenge the Reserve Bank of Australia’s claim that policy is “close to balance,” arguing the data instead point to a persistent inflation problem driven by excessive fiscal spending, ultra-low unemployment, and years of overly easy monetary policy. They explain why the RBA may ultimately need to lift rates well above market expectations, why global inflation risks remain underpriced, and how AI capex, energy shocks, and Trump’s economic strategy could reinforce a higher-for-longer rate environment. The discussion concludes with the investment implications: avoid default risk, prioritise liquidity, and recognise why cash and high-quality bonds may now be among the most attractive assets available.

This information is suitable for wholesale investors only and has been produced by Coolabah Capital Institutional Investments Pty Ltd ACN 605806059, which holds Australian Financial Services Licence No. 482238 (CCII). The views expressed in this recording represent the personal opinions of the speakers and do not represent the view of any other party. The information does not take into account the particular investment objectives or financial situation of any potential listener. It does not constitute, and should not be relied on as, financial or investment advice or recommendations (expressed or implied) and it should not be used as an invitation to take up any investments or investment services. Whilst we believe that the information discussed in the podcast is correct, no warranty or representation is given to this effect, and listeners should not rely on this information when making any decisions. No responsibility can be accepted by CCII to any end users for any action taken on the basis of this information. Any performance data presented on this site is pre-fees for institutional clients that negotiate custom fee rates, and these solutions are not available to retail investors. No investment decision or activity should be undertaken without first seeking qualified and professional advice. CCII may have a financial interest in any assets discussed during the podcast. Listeners in Australia are encouraged to visit ASIC's MoneySmart website to obtain information regarding financial advice and investments.