An unpredictable ceasefire means unpredictable prices

Summary

Marketplace Morning Report – Episode Summary

Episode Title: An unpredictable ceasefire means unpredictable prices
Date: July 8, 2026
Host: Sabri Benishore (in for Kimberly Adams)
Featured Guest: Dan Coatsworth, Head of Markets at AJ Bell
Additional Reporting: Henry Epp

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Overview

This episode focuses on the sudden end of a ceasefire in the Middle East and its immediate and potential ripple effects on global oil prices, inflation expectations, and consumer sentiment. The episode explores how geopolitical instability disrupts economic recovery, affects everyday expenses, and shapes market and consumer psychology.

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Key Discussion Points & Insights

1. Geopolitical Escalation and Oil Prices

• Context:

  • The US accuses Iran of breaking a memorandum of understanding by attacking three tankers in the Strait of Hormuz.
  • The US retaliates with airstrikes and revokes Iran’s waiver to sell oil.
  • Iran targets US military sites in response.
  • President Trump announces, “the ceasefire is, quote, over, but the talks can continue.” ([01:33])

• Market Response:

  • Oil prices soar by 6% in early morning trading.
  • Dan Coatsworth: “You're looking [at a] 5, 6% jump in a single day. I mean, this is, this is the market stepping back with quite [being] sort of alarmed by what's going on.” ([02:12])

• Strait of Hormuz Traffic:

  • Partial traffic had been resuming, but renewed attacks and political uncertainty threaten a complete shutdown.
  • Dan Coatsworth: “Part of the reason why Donald Trump has said that ceasefire [is] over is because there were some attacks on commercial ships… There’s been some traffic going through, but now, of course, the question mark is, is anything going to go through now?” ([03:22])

2. Implications for Consumers and Businesses

• Gasoline Prices:

  • Recent relief at the gas pump may vanish rapidly as oil prices spike.
  • Dan Coatsworth: “Unfortunately you'll probably feel it in your pocket very soon. If you go up to fill up today, you'll see it.” ([04:06])

• Spending and Business Sentiment:

  • Lower oil prices had buoyed consumer confidence and potential business investment.
  • Renewed uncertainty may “put question markers” on spending and hiring plans. ([04:37])
  • Markets will watch if the price surge is “a one day knee jerk reaction” or the start of “multiple days in a row where cost pressures go up again.” ([04:58])

3. Inflation Expectations and Economic Psychology

• Fed Survey Results:

  • Consumers predict inflation to run at 3.7% over the next year, as measured before the latest escalation.
  • Henry Epp: “Consumers have kind of been bracing for it.” ([07:16])

• Inflation Expectations Self-fulfilling:

  • Even when gas prices fell, expectations for inflation remained high.
  • Sarah House (Wells Fargo): “We've just gotten so used to seeing one price increase after another.” ([07:56])
  • Henry Epp: “If we think prices are going to go up, that can cause them to go up.” ([08:04])
  • Justin Wolfers (University of Michigan): “Consumers might go buy cars or appliances now if they think those things will get more expensive, then that can drive up demand and push prices higher. Or workers will ask for raises to handle higher prices.” ([08:21])

• Labor Market Contrast:

  • Omer Sharif (Inflation Insights): “This is not the kind of labor market where you can really kind of push wage demands like you were able to do in 2022 and 2021, and that could hold inflation back, though it’s not an ideal situation for workers.” ([08:52] – [09:01])

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Notable Quotes & Memorable Moments

• [01:33] President Trump: “The ceasefire is, quote, over, but the talks can continue.”
• [02:12] Dan Coatsworth: “You're looking [at a] 5, 6% jump in a single day. I mean, this is, this is the market stepping back with quite [being] sort of alarmed by what's going on.”
• [03:22] Dan Coatsworth: “There's been some traffic going through, but now the question mark is, is anything going to go through now?”
• [04:06] Dan Coatsworth: “Unfortunately you'll probably feel it in your pocket very soon. If you go up to fill up today, you'll see it.”
• [07:56] Sarah House (via Henry Epp): “We've just gotten so used to seeing one price increase after another.”
• [08:04] Henry Epp: “If we think prices are going to go up, that can cause them to go up.”
• [08:21] Justin Wolfers: “Consumers might go buy cars or appliances now if they think those things will get more expensive… Or workers will ask for raises to handle higher prices.”
• [08:52] Omer Sharif: “This is not the kind of labor market where you can really kind of push wage demands like you were able to do in 2022 and 2021…”

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Timestamps for Key Segments

• [01:00–03:18] – Analysis of ceasefire collapse and oil market fallout with Dan Coatsworth
• [03:22–04:06] – Risks to global shipping and immediate consumer impacts
• [04:06–05:20] – Effects on consumer spending, business confidence, and market uncertainty
• [07:16–09:09] – Fed survey on inflation expectations and the psychology of price hikes (Henry Epp report)

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Tone & Style

• Concerned and analytical, with a sense of urgency and realism about continued unpredictability.
• Focused on immediate, day-to-day impacts for regular people and cautious market dynamics.

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Summary Takeaway:
The breakdown of a fragile ceasefire in the Middle East is sending shockwaves through oil markets, threatening to reverse recent gains against inflation and placing immediate upward pressure on consumer prices worldwide. With inflation expectations already elevated and economic psychology playing a major role, the episode underscores the fragility of recent progress and the unpredictability that lies ahead for both households and markets.

Transcript

[Podcast Host]

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[Sabri Benishore]

unpredictable ceasefire means unpredictable prices. From Marketplace, I'm Sabri Benishore in for Kimberly Adams. So just to recap where things stand, the US Says Iran violated a memorandum of understanding when it attacked three tankers in the Strait of Hormuz. And so the US says it launched airstrikes against 80 targets in Iran and canceled a waiver allowing Iran to sell oil. Iran, Iran says that and Israeli attacks on southern Lebanon were violations. And Iran targeted 85 US military sites around the Persian Gulf. President Trump says the ceasefire is, quote, over, but the talks can continue. So that is where we are at. Oil prices are up 6% so far this morning. And we've got Dan Coatsworth here to talk about the economic ripple effects of it all. He's head of markets at the UK based investment platform AJ Bell. Hi, Dan.

[Dan Coatsworth]

And morning to you.

[Sabri Benishore]

So let's talk about oil prices because that feeds in, as we have seen, to everything, you know, from fertilizer and food to transportation. Oil prices had fallen at one point very close to where they were before the war. Is that progress just about to be out the window? What happens to oil prices now?

[Dan Coatsworth]

I mean, as we're speaking, you know, you're looking 5, 6% jump in a single day. I mean, this is, this is the market stepping back with quite sort of alarmed by what's going on. For Donald Trump to come out and essentially say the ceasefire is over, it has really shocked people. And of course, people are now asking the question, saying like, well, hang on a minute, I thought that oil prices coming back would suggest that the Strait of Hormuz was reopening we were seeing ships going through, but now essentially saying, well, there's a major risk to, to traffic flowing through the straightforward moves again. And so therefore the attention switches back to concerns about oil supplies going forward. Of course, that's why the price is jumping up for a one day movement. We haven't seen this for a while because whilst it feels like we've been going for months and months where oil's actually been trading really high, it's been falling quite a lot recently. So, yeah, just to the point where everyone thought this is everything seems to be near. A resolution is like you've torn up the piece of paper and we've got to start again.

[Sabri Benishore]

Are ships going through at all right now?

[Dan Coatsworth]

So what's been happening is there has been some traffic, but part of the reason why Donald Trump has sort of said that ceasefire over is because there were some attacks on commercial ships going through the straightforward moves a couple of days ago. So I think that the idea that traffic is flowing freely, it was never going to return to normal at the click of a finger. There's been some traffic going through, but now of course the question mark is, is anything going to go through now?

[Sabri Benishore]

Consumers had been getting some relief at the gas pump. The average price of gas has fallen in recent weeks in the US down to $3.80 a gallon. How quickly does an escalation like what we're seeing take to show up at the gas pump?

[Dan Coatsworth]

The normal trend is for as soon as the sort of oil prices to go up, you'd see immediately the gas pump for those prices to go up. What you typically see is a lag for when oil prices fall. It still costs matrix a lot more before they can see those savings. So yeah, unfortunately you'll probably feel it in your pocket very soon. If you go up to fill up today, you'll see it. Of course, the other thing is that oil prices having come back in recent weeks, that should have been positive for consumer sentiment. For people sort of feeling a bit more perhaps willing to go and spend money in the shops, it might be good for businesses thinking about investing in the future because now these sort of oil prices going back up again, that sort of puts question markers like do I need to sort of worry, perhaps spend a little less when I go to shops and businesses are going well, we're back to uncertainty. Do I pause on any sort of major investment plans or any hiring plans? So this is quite a significant event and I think markets will be watching to see if this is just a, a one day knee jerk reaction? Or actually, are we now back into the territory where we could see multiple days in a row where cost pressures go up again?

[Sabri Benishore]

Dan Coatsworth, Head of Markets at the UK based investment platform AJ Bell Dan, thank you so much.

[Dan Coatsworth]

You're welcome.

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[Sabri Benishore]

Hormuz is threatening a new round of inflation pressure, and it turns out consumers have kind of been bracing for it. The Federal Reserve bank of New York has this survey where they ask people what they expect inflation to do and yeah, they expect it to be bad, 3.7% over the next year. And that was when consumers were mildly optimistic about gas prices. Marketplaces Henry Epp reports on why we think prices might keep climbing and why it matters.

[Henry Epp]

Typically, if gas prices fall, consumers temper their expectations for inflation in the near term. But that's not happening right now, says Sarah House, an economist at Wells Fargo, because we've just gotten so used to seeing one price increase after another.

[Dan Coatsworth]

If it wasn't media headlines about tariff related cost increases, then it was gasoline.

[Amy Scott]

If it wasn't egg prices, it's beef

[Henry Epp]

prices, and that's giving us this sense that prices are just going to keep rising, which is a big deal, because if we think prices are going to go up, that can cause them to go up.

[Podcast Host]

So inflation expectations are one of those places where belief can create its own reality.

[Henry Epp]

Justin Wolfers is a professor of economics and public policy at the University of Michigan. For example, consumers might go buy cars or appliances now if they think those things will get more expensive than that can drive up demand and push prices higher. Or workers will ask for raises to handle higher prices.

[Podcast Host]

My boss gives me the raise and

[Dan Coatsworth]

all of a sudden my boss has to raise his or her prices.

[Henry Epp]

One difference between this current bout of inflation and the one we went through after the pandemic, there aren't as many open jobs, says Omer Sharif at Inflation Insights.

[Dan Coatsworth]

This is not the kind of labor market where you can really kind of push wage demands like you were able to do in 2022 and 2021, and

[Henry Epp]

that could hold inflation back, shareef says, though it's not an ideal situation for workers. I'm Henry Epp for Marketplace, and in

[Sabri Benishore]

New York, I'm Sabree Benishore with the Marketplace Morning Report from APM American Public Media.

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[Podcast Host]

Applause.