Scott Bessent has a problem his administration built for him. The Iran war launched on 28 February closed the Strait of Hormuz, removed roughly a fifth of the world’s daily oil supply and pushed Brent above $109 a barrel. The UST 10-year yield has risen to about 4.37%. Markets price zero Fed rate cuts for the rest of the year. Mortgage rates are climbing back toward levels that cost his party seats in previous cycles. ...
Powell leaves on 15 May. Warsh may not be confirmed in time. The Iran war has ensured this transition will be anything but orderly.
The 1970s parallel for a gold crash requires a Volcker. There is no Volcker in 2026.
For over a decade, the default recommendation for retail investors worldwide has been simple: buy a global index fund and forget about it. The MSCI All Country World Index, or its close cousin, the S&P 500, became the intellectual path of least resistance. And for a long time, it worked beautifully. But the conditions that powered that trade are shifting. I believe we are entering a period where Japanese equities will meaningfully outperform global indices. The argument is not a short-term tactical call. It is a structural argument built on five mutually reinforcing pillars. ...
Between 1995 and 2021, Japan’s average annual inflation rate was approximately 0.2%. For an entire generation, prices were essentially flat or falling. The condition was far from neutral. Deflation corroded the economy from the inside, suppressing wages, discouraging investment, rewarding cash hoarding and keeping equity valuations perpetually depressed. That era is over. As of December 2025, Japan’s core consumer price index (excluding fresh food but including energy) had remained above the Bank of Japan’s 2% target for 45 consecutive months. The headline CPI averaged 3.2% for calendar year 2025, according to Japan’s Statistics Bureau. Even the “core-core” measure excluding both food and energy, the closest proxy for domestically generated inflation, has been running above 2% for over three years. ...