The two-week Iran war ceasefire, which was dealt a blow with the closure of the Strait of Hormuz Wednesday, is nonetheless sending stocks, gold and Bitcoin higher. On the flip side, the peace deal, however temporary, is pushing oil, volatility (VIX) and the 10-year Treasury yield lower.
So what happens tomorrow, the day after that, and so on?
Despite the initial steep drop in the price of crude, Todd Rabold, investment management partner with Callan Family Office, told InvestmentNews we expect energy prices to remain higher due to a geopolitical risk premium that will take some time to subside.
“If tolls are implemented in the Strait of Hormuz, that will be passed along in the cost of oil. Higher energy prices have downstream implications for inflation, something we are watching closely,” Rabold said.