Given the recent crash in commodity prices, price pressures ought to fade away bigtime in the next couple of months. My guess is that risk will bottom in late Aug/early Sept as the Ukraine war approaches a conclusion, and the Fed starts talking dovish.
The Fed has unfortunately stated they are looking at Core PCE at or below 3% by year end. Since the numbers are made up anyway, look for the bottom to be in when the made up numbers match this expectation. People think the Fed was caught off guard by inflation. They were not. They knew what they were doing. In that same vein...
I think oil will bounce back. There's a structural supply problem caused by years of underinvestment, ESG discouraging investment, and horrible energy policy from current administration. Rents and wages don't go lower. And wages have not kept up with inflation. Both will pressure earnings.
Certainly there has been some. But the supply destruction has been faster. No one is building new refineries or pipelines. Investors who were thinking of investing in oil and gas infrastructure only need to look at the Keystone XL pipeline to see how politics can screw up an investment that makes sense. Meanwhile, over in China: https://e360.yale.edu/features/despite-pledges-to-cut-emissions-china-goes-on-a-coal-spree
Will you STOP with the Keystone XL bit? I used to think that was a "major" impediment to our domestic flows, but realized how minuscule it really is compared to the bigger issue of NG routing. Oil is huge, yes, but NG is even more huge. If Keystone XL was never cancelled by Biden, it would still be under construction! That thing, if approved, is going to take YEARS to complete! We have a lot more on our plate energy-supply-wise.
Killing the Keystone XL while allowing Nordstream 2 to go forward was a good example of America Last policy. Kill jobs here while allowing Europe to have a greater dependence on Russian energy. https://www.businessinsider.com/nord-stream-2-biden-gift-to-putin-could-destabilize-europe-2021-10 Look how that played out. Angela Merkel really screwed Germany. Made Europe more dependent on Russia in order to look green. https://pbs.twimg.com/media/FW_MAlcWAAESwb5?format=jpg&name=large https://www.businessinsider.com/ger...russia-cuts-natural-gas-climate-energy-2022-6 I never claimed that Keystone would be a silver bullet, but it's an example of the unnecessary hostility shown towards the fossil fuel industry that discourages investment. I'm all for green energy, but trying to force people off of one form of energy while the next form of energy is not yet ready is just really bad policy. My prediction, the Russia / Ukraine war will drag on for longer than most expect. I think / fear this winter will get interesting.
The hell we had to do with Nordstream? How on earth did we "let it go"? We (USA) had no say on that thing.