Clock Strikes Midnight
Most economic cycles have ended with central bank tightening. That is well known.
What investors seem to be overlooking today is that we are in a late-cycle economic environment and have just encountered a catalyst which will push inflation higher and prevent central banks from being proactive.
Let’s run through the reasons it looks like the clock is about to strike midnight on this cycle.
Jet Fuel Prices in Europe
Fuel prices are surging globally. Global average jet fuel prices just rose +82.8% MoM. Economies that import most of their energy, namely Europe and most of Asia, are especially hurt by the spike in oil prices. And to no surprise, the ECB is now expected to HIKE rates twice by year-end.
US Diesel Price Surge
Just because the US is now world’s largest energy exporter - does not make us immune from the impact of rising prices. Diesel fuel prices are the lifeblood of freight, agriculture, and construction. At above $5/gallon there is high likelihood of inflation to come in the US.
The Fed “looking past” a supply-side shock, doesn’t mean they will cut rates.
Flatbed Rejection Rates in the US
Keep in mind, US flatbed rejection rates (trucking cost) were already surging BEFORE we attacked Iran.
There were some industry specific drivers here with some transportation/trucking companies going bankrupt in 2025, but this is also a function of immigration policy. Less supply of labor. If you are a trucker right now, you are asking for a raise.
The point here is this - we already had building inflationary pressure in the system before Iran. The recent events just pour gasoline on the fire (pun intended).
SPY ETF Volume
With rate cuts being taken off the table and oil prices rising, everybody has shifted defensive. So much defensive that you now have the wealth management twitter icons talking about record put buying and record hedge fund equity sales.
Ya… that’s what happens when a war breaks out. If you think we are anywhere near long-term capitulation (nevermind a lack of short-term capitulation shown above) - you do not understand how the end of a cycle works.
Margin Debt / GDP
Margin debt at the end of 2025 was $1.23 trillion. We are nowhere near long-term capitulation.
This also speaks to how sensitive the real economy is to stock prices. Moreso than at any point in US economic history.
This is why oil prices rising is so important. It’s not about what the price of gas will be next week. It is about the fact that we are at the tail-end of a growth cycle, with the consumer beginning to roll-over, with stock prices beginning to roll-over, with the economies sensitivity to a bear market having near been higher, and the Fed just got put INTO A BOX.
You sell into strength here. Plain and simple. The risk/reward in markets in the next 6 months is the equivalent of getting sushi at an airport.







