Skip to main content
Subject:

Global Financial Markets

Inflation, stagflation or deflation

Thursday, 02 July 2026, written by Edward Markus

It is striking how differently economists and analysts view the implications of the Iran deal and the rise of AI for economic growth and inflation. If we look at the charts for gold, the yield curve, the S&P 500 and the dollar index, the markets’ expectations are quite clear. In this report, we examine what these market expectations are, how we view them, what role China’s rise plays in this context, and what this means for key interest rates and exchange rates.
 

This report is published: Bi-weekly

Get access to this report

Request Report

Previous reports

Oil prices fall, but the risk of inflation remains

Thursday, 18 June 2026

Following the deal between Iran and the US, energy prices have fallen and a major risk factor is now behind investors. Does this clear the way for falling inflation and further rising share prices, or will the Fed put new obstacles in the way in the form of higher interest rates?

English Nederlands Deutsch

Is AI a bubble?

Thursday, 04 June 2026

Expectations regarding the positive impact of AI on the economy and profits are running high. Rightly so, but the share prices of AI-related companies have risen so sharply that the risk of disappointment regarding the profitability of AI investments has increased significantly. For the time being, we believe that developments in this area and what happens in the Strait of Hormuz will be decisive factors for the financial markets.

English Nederlands Deutsch

Markets may be at a major turning point

Thursday, 21 May 2026

Unfortunately, there doesn’t ring a bell at the top. However, a number of developments are currently underway that suggest a significant stock market peak is imminent or has already been reached. If we are proved right and stock prices fall in the coming months, this will, via the wealth effect, also affect economic growth and, consequently, interest rates and exchange rates.

English Nederlands Deutsch
View previous reports

Eddy's Weekly Market Insight

Friday, 03 July 2026

Eddy's Weekly Market Insight

Inflation, Stagflation, or Deflation? We receive research from around the world, and what stands out is the wide divergence in current market expectations. The outlook for oil prices alone illustrates this clearly. Morgan Stanley argues that, following the reopening of the Strait of Hormuz, the oil market could move into surplus, putting further downward pressure on prices. Goldman Sachs, by contrast, expects oil prices to remain broadly in line with current levels for the time being. Other analysts, however, anticipate a significant increase in oil prices as global economic activity strengthens and inventories are rebuilt, reflecting the growing recognition of the vulnerability of key supply routes. The outlook for the broader economy is equally divided. Some economists expect AI to advance rapidly, driving a substantial increase in productivity. In their view, this could lead to higher unemployment and ultimately result in deflation. Others...
Continue reading
— Edward Markus, Founder & Chief Economist