Here’s the thing about ceasefires—they’re great until they’re not. Yesterday’s U.S./Iran deal looked like a win, but this morning’s reality check? The Strait of Hormuz is still basically locked down, Iran’s Parliament is already calling foul, and oil prices are climbing back up. So much for that “military triumph” narrative.
But that’s not even the worst part of today’s news.
The PCE inflation report just landed, and it’s basically saying: “Yeah, inflation was already a problem before the war started.” Core PCE came in at 3.0%—well above the Fed’s cozy 2% target. Meanwhile, consumers are spending more while earning less, which is the economic equivalent of a credit card maxed out with no raise in sight.
Here’s what’s wild: this data is from *before* the war really hit the economy. We’re talking February numbers. Since then? Gasoline jumped 38% in six weeks. Shipping surcharges are everywhere. Fertilizer prices spiked 40%. Amazon’s slapping a 3.5% fuel surcharge on deliveries starting April 17. Even aluminum and plastics are up 8-40%. The inflation wave is still rolling in, and we haven’t even seen the full damage yet.
The Fed’s in a pickle. They can’t cut rates because inflation’s still running hot. But they can’t raise rates either because the economy’s already showing cracks—GDP growth got slashed to 0.5%, and the services employment index hit recession-level territory. It’s like being stuck between a rock and a hard place, except both the rock and the hard place are on fire.
Fed Chair Powell basically admitted they’re just… waiting. Watching. Hoping the oil shock fades before they have to make any big moves. Spoiler alert: it probably won’t fade as fast as they’d like.
Here’s the kicker, though. Even with the ceasefire holding (barely), oil isn’t going back to $65. It’ll probably settle in the $80s—still way higher than pre-war levels. That’s good news for AI and tech stocks that can absorb higher costs. Bad news for regular consumers who’ll quietly absorb a wave of price increases on everything from groceries to electricity bills.
So what’s the play? Honestly? Patience. This market’s split into two tracks: tech companies that can weather the storm, and consumer-facing businesses that are about to get squeezed. The honest answer is “it’s complicated,” and that’s not the kind of thing that makes for a catchy headline.
The real takeaway: inflation’s not dead. It’s just taking a victory lap while everyone’s distracted by geopolitics. Your wallet should probably start bracing for impact.
