Prof G Markets Why The Iran War Could Reignite Inflation
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Mar 4, 2026 
Matthew Martin, Semafor’s Saudi bureau chief reporting from the Gulf. Robert Armstrong, Financial Times markets commentator tracking investor flows. Mark Zandi, Moody’s Analytics chief economist on inflation and policy. They discuss market moves after the Iran conflict, how oil spikes could lift inflation and strain households, risks of supply-chain and infrastructure damage, and whether any true safe havens exist.
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Markets Priced A Short Contained Conflict
- Markets initially priced this as a short, contained strike similar to Venezuela with a quick resolution.
- As Iranian resistance proved more resilient, crude rose and stock prices started creeping down, signaling a worse short-term scenario than first expected.
Oil Shock Can Break Stocks Bonds Diversification
- An oil shock can flip the usual negative correlation between stocks and bonds into a positive correlation, which is dangerous.
- If oil-driven inflation rises, bonds can't rally when stocks fall, producing a stagflation-like, painful portfolio outcome.
Prepare For Higher Pump Prices Impacting Lower Income Households
- Expect a sustained $10 rise in WTI to add roughly 25 cents to a gallon of regular unleaded if it lasts several weeks.
- That cost disproportionately hurts lower-middle income American households, adding hundreds annually.