Bid farewell to the energy single-factor: a new logic for inflation driven jointly by fiscal expansion and AI prosperity
Over the past few years, the market’s attribution logic for inflation has been relatively singular, almost forming a consensus: as long as geopolitical risks ease and the energy supply side restores balance, inflation pressure would subside accordingly. This linear way of thinking has dominated the underlying logic of asset allocation—investors are accustomed to using crude oil and natural gas futures as a “weather vane” for macroeconomic conditions. However, current macro signals indicate that this traditional framework is starting to fail. The structure driving inflation is undergoing a fundamental reshaping: it is no longer merely periodic fluctuations in energy prices, but evolving into a multidimensional setup supported jointly by fiscal expansion and the prosperity of the artificial intelligence (AI) industry. This means that even if energy prices fall, inflation stickiness may still persist due to fiscal and technology-related
Follow me—my next quick read of the market will not be missed.
Over the past few years, the market’s attribution logic for inflation has been relatively singular, almost forming a consensus: as long as geopolitical risks ease and the energy supply side restores balance, inflation pressure would subside accordingly. This linear way of thinking has dominated the underlying logic of asset allocation—investors are accustomed to using crude oil and natural gas futures as a “weather vane” for macroeconomic conditions. However, current macro signals indicate that this traditional framework is starting to fail. The structure driving inflation is undergoing a fundamental reshaping: it is no longer merely periodic fluctuations in energy prices, but evolving into a multidimensional setup supported jointly by fiscal expansion and the prosperity of the artificial intelligence (AI) industry. This means that even if energy prices fall, inflation stickiness may still persist due to fiscal and technology-related
Follow me—my next quick read of the market will not be missed.