Forward Guidance The Fed Is Trapped As Oil Drives Inflation Higher | Weekly Roundup
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Mar 27, 2026 
Joseph Wang, macro analyst and host of Monetary Macro, brings sharp takes on energy markets and monetary policy. He discusses how Middle East oil shocks raise recession odds. He unpacks the Fed’s policy dilemma, tight liquidity, banking regime shifts, and where future liquidity might come from. Short, direct, and timely.
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Middle East War Is The Dominant Macro Risk
- The Middle East war is the primary macro driver because it raises energy prices and risks global recession.
- Joseph Wang notes Brent near $100 and Strait of Hormuz closures could spike oil, gas, and fertilizer shortages worldwide.
Oil Shocks Force Central Banks Into A Bind
- Energy supply shocks can flip monetary policy from tightening to constrained as growth weakens.
- Quinn Thompson and Joseph Wang highlight precedents where sustained oil spikes forced central banks to prioritize growth over inflation.
Strait Closure Puts A Lid On Risk Assets
- The Strait closure creates a negative carry environment that delays Fed easing and caps risk asset multiples.
- Felix Jauvin argues even if the war ends, inflation prints will keep the Fed on pause for months, pressuring equities.