Why a Closed Strait of Hormuz Is a ‘Smoking Risk’ for Global Markets
3/15/202631 min
In this week's episode of WSJ’s Take On the Week, co-hosts Telis Demos and Miriam Gottfried discuss how attacks in the Strait of Hormuz are sending shockwaves through the markets and pushing oil prices higher. They analyze how the most recent jobs report showing a 92,000 job loss in February – and rising inflation fears – have complicated the Federal Reserve’s mandate. Plus, the hosts look at how some of our listeners and viewers are adapting their portfolios to respond to the war in Iran.
After the break, Miriam and Telis are joined by James Stavridis...
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First 90 secondsMike McNerney0:00
I'm Mike McNerney, equity investment strategist. Markets move fast. My mission is to provide market insights to our clients that help turn uncertainty into opportunity. Janice Henderson. Investing in a brighter future together.
Miriam Gottfried· Host0:13
[upbeat music] Hi, Talis.
Telis Demos· Host0:18
Hi, Miriam.
Miriam Gottfried· Host0:18
Well, on today's episode, we have a really interesting conversation about the military, defense, and protecting, if possible, the Strait of Hormuz.
Telis Demos· Host0:29
Obviously, the huge question on the market's mind right now. But we also, this upcoming week, have a Federal Reserve meeting. The expectation is that the Fed is not going to do anything. It's a near lock according to the futures markets. And in fact, the market really isn't expecting the Fed to cut rates now until September. And of course, what is staying the Fed's hand is what is going on with the Middle East and the price of oil.
Miriam Gottfried· Host0:58
It all goes back to the Strait of Hormuz [laughs].
Telis Demos· Host1:00
It all goes back to the Strait of Hormuz.
Miriam Gottfried· Host1:02
And the reason that that could affect what the Fed is gonna do, remember, is that, um, oil not being able to get through the Strait of Hormuz means that oil prices are rising, which causes inflation. It's not just oil, it's also natural gas, and as we'll hear about, fertilizer as well. So there are a lot of factors that go into the cost of goods that we buy that are rising in price, and that can cause inflation. And when the Fed sees higher inflation