supply shock

The Iran War has triggered an energy supply shock, prompting the IEA to significantly reduce its global oil demand forecast. The situation has shifted from a supply shock to an oil glut, with the IEA highlighting the scale of demand destruction caused by the conflict.

The European Central Bank raised interest rates for the first time since 2023, contrasting with the Federal Reserve's approach, as the ECB chooses to increase rates amid a supply shock.

Kevin Warsh has been sworn in as the new Federal Reserve Chair, but outgoing Chair Jerome Powell remains on the Fed Board, potentially enabling him to act as a 'shadow chair' and push for rate hikes despite concerns about an oil-price shock. The article argues that rate hikes would worsen economic vulnerabilities in housing, manufacturing, and small-business credit, citing historical precedents where past Fed chairs like Alan Greenspan and Ben Bernanke cut rates during oil shocks.

Bitcoin's price has remained relatively stable this year while oil surged 75% and gold rose 40%, challenging the assumption that Bitcoin correlates with commodities during crises. The market shifted toward physical assets like oil and gold amid supply shocks, undermining Bitcoin's perceived role as an inflation hedge.