Why The Iran War Could Reignite Inflation

Summary

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Prof G Markets

Episode: Why The Iran War Could Reignite Inflation

Date: March 4, 2026
Host: Ed Elson
Guests: Mark Zandi (Chief Economist, Moody’s Analytics), Robert Armstrong (U.S. Financial Commentator, Financial Times), Matthew Martin (Saudi Arabia Bureau Chief, Semaphore)

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Episode Overview

This episode of Prof G Markets examines the unfolding Iran conflict and its ripple effects on global capital markets, with a focus on inflation risks. Instead of a single guest, host Ed Elson assembles a panel of three experts to provide diverse perspectives on investor reaction, near- and long-term inflation threats, and the knock-on effects for U.S. and global consumers. Throughout the rapid market swings and emerging economic anxieties, the panelists unpack whether risk is being properly priced and which scenarios could mean a much heavier blow.

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Key Discussion Points & Insights

1. Market Reactions to the Iran Conflict

• U.S. indices fell sharply, with early trading down up to 2.5% before a modest partial recovery. Oil spiked as much as 9%, touching $85/barrel for Brent crude—the highest since 2024. (02:03)
• Treasury yields increased on fears that surging energy prices would stoke inflation.
• Global contagion: European stocks dropped 3%, Asian markets slid, and South Korea's KOSPI plunged over 7%. Safe-haven moves propelled the dollar and Swiss franc to new highs. (02:03)
• Notable Quote:

  "The major indices sold off yesterday morning as the US warned that its strikes on Iran will continue to ramp up in force."
  — Ed Elson (02:03)

2. Investor Psychology & Scenario Pricing

• Initial market calm was predicated on the expectation of a "short, tidy little war" following the Venezuela regime change playbook.

• As Iranian resistance held, investors began factoring in a potentially more protracted and disruptive conflict. (04:13)

• Armstrong's Take:

  "Nothing like the worst case scenario is being priced in right now, Ed. But a slightly worse best case scenario is what I would say is priced in."
  — Robert Armstrong (04:13)

• Regional Perspective (Riyadh/Dubai):
  Matthew Martin paints a picture of relative everyday calm in Riyadh, but more acute anxiety in places like Dubai where attacks have occurred.

  "Some people are thinking this is going to be really significant, this is going to be dramatic and long lasting. And some people are kind of taking a much more sanguine view of it."
  — Matthew Martin (05:22)

3. Effects of Sustained Oil Price Increases

• Economic Translation:
  • Rule of thumb: Each sustained $10/barrel spike in oil raises U.S. gasoline prices by ~$0.25/gallon. (09:12)
  • This is manageable but burdensome—especially for lower/middle-income Americans, who feel the impact most acutely.

  “That's real money. And if you add it up over a year, it's 2-300 bucks in addition, 20 bucks a month. And that's pretty tough for people in that situation.”
  — Mark Zandi (09:12)

• Immediate Implications:
  • Oil was the one non-inflated necessity; now prices are rising, fueling broader affordability issues and discontent.

4. International Ripple Effects

• Greater Shock Outside the U.S.:

  • European and Asian stocks are hit harder, partially due to direct gas price exposure.
  • Attacks on Qatar’s energy facilities have led to a spike in European natural gas—up 40% compared to 6-7% in the U.S. (13:50, 14:26)

  “European gas is up like 40%. And especially Germany is an extremely gas-sensitive economy.”
  — Robert Armstrong (14:26)

• Why U.S. Is (Somewhat) Insulated:

  • U.S. is now the largest oil producer—it consumes roughly what it produces.
  • Producers may eventually benefit from high prices, but consumers are immediately pinched.

  “In many of those other countries, they're full-on consumers. They don't produce any energy. So there's nothing but negative here.”
  — Mark Zandi (14:42)

5. Fed Policy and Looming Stagflation

• Inflation Context:
  • Recent U.S. inflation data (producer prices, ISM manufacturing) had already dimmed rate cut prospects. Now, energy price spikes compound those pressures.
  • If inflation persists (from oil/gas), the Fed may pause or reverse expected rate cuts, further pressuring markets. (16:44)

  “You can sort of see the Federal Open Market Committee thinking, geez, maybe cutting rates might now not be so smart.”
  — Robert Armstrong (16:44)

• Three Negative Supply Shocks for the U.S.:
  1. Tariffs (inflationary, weaken growth)
  2. Restrictive immigration (raises costs)
  3. Rising oil prices (compound the above)
  • Can resilience last under mounting load? (18:11)

6. Are Markets Underestimating Tail Risks?

• Panel Skepticism:

  • Markets may be too sanguine, operating on recent history where geopolitical shocks smoothed over quickly.
  • Real risk: conflict outlasts “a couple of weeks,” causing global economic ripples, more severe price shocks, persistent uncertainty, and potentially lasting infrastructure damage. (20:10)

  “There are a lot of tail risks here that I don't think the market is quite accepting and quite pricing in at the moment.”
  — Matthew Martin (21:19)

• Uncertainty as the Dominant Theme:

  • U.S. and markets act as if the situation will resolve swiftly.
  • In the Gulf, the next weeks are seen as especially unpredictable, with all major actors’ next moves unclear. (22:29)

  “The forcefulness of their (Iran’s) response is one of the things that has caught everybody by surprise.”
  — Matthew Martin (22:29)

7. If Everything Falls, What Is the Safe Haven?

• As the panel observes, both stocks and bonds have been falling in tandem, a stagflation signal. Gold is expensive and volatile; crypto and other assets are similarly elevated. (07:45, 26:04)
• Safe havens left: The U.S. dollar and cash—but the panel doubts that even these are as sound as history suggests.

  “It really is the dollar…if we get a proper global crisis, the greenback’s going to be pretty appealing.”
  — Robert Armstrong (26:04) “I don’t think there’s anywhere to hide. One of the reasons to be more nervous about all this is that valuations are high across all asset classes… It all goes into cash.”
  — Mark Zandi (26:35)

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Notable Quotes & Moments (with Timestamps)

• Ed Elson, on regime change record:

  “10—that is the percentage of U.S. imposed regime changes that have ever led to a successful and lasting democracy… But I'm sure that this time will be different.” (01:30)

• Armstrong’s pithy war scenario summary:

  “Slightly worse best case scenario is what I would say is priced in.” (04:13)

• Matthew Martin on lived experience in the Gulf:

  “If you’re sitting here…hotels you’ve stayed in and restaurants you’ve eaten in blowing up, then you feel quite differently about it.” (20:10)

• Mark Zandi on the U.S. consumer:

  “A higher gas price doesn’t matter at all for a high-income, high net worth household… but it means a lot for lower and middle-income Americans." (09:12)

• Armstrong on market squeeze:

  “Stocks go down, bonds go down…That’s a painful scenario. That’s stagflationary—that’s the pain point to watch.” (07:45)

• On safe havens:

  “There’s nowhere to hide because the valuations are so high. And it all goes into cash.”
  — Mark Zandi (26:35)

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Important Timestamps

• 02:03 — Market snapshot: indices, oil, treasuries, overseas action
• 04:13 — Armstrong on short-war market psychology
• 05:22 — Martin’s Gulf region view: nerves, but not panic
• 09:12 — Zandi’s oil price “rules of thumb” for consumers
• 13:50 — Global markets’ (Asia/Europe) sharper reaction
• 16:44 — Armstrong on Fed’s inflationary dilemma
• 18:11 — Zandi: three U.S. supply shocks raising stakes
• 20:10 / 22:29 — Martin: Tail risks & regional uncertainty
• 24:25–25:39 — Discussion of infrastructure attacks as true tail risk
• 26:04–26:35 — Armstrong and Zandi on the flight to safety (cash, dollar, gold debate)

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Episode Summary

The panel delivers a multidimensional analysis of the Iran conflict's impact on markets, warning that investor complacency about a swift resolution could set up for a “fat tail” scenario—prolonged war, lasting inflation, and no clear flight to safety. With pressures bearing hardest on lower/middle income households and international markets absorbing even larger shocks, the episode repeatedly returns to the fragility and uncertainty coursing through the system. The consensus: markets have not yet priced in the worst, and if disruption extends or infrastructure is severely damaged, everything from central bank policy to the very concept of risk-off assets will be severely tested.

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Transcript

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[Matthew Martin]

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[Ed Elson]

Today's 10 that is the percentage of U.S. imposed regime changes that have ever led to a successful and lasting democracy. The other 90% have actually made things worse, resulting in harsher governance and in many cases, civil war. But I'm sure that this time will be different.

[Matthew Martin]

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[Ed Elson]

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[Matthew Martin]

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[Ed Elson]

Welcome to Property Markets. I'm Ed elson. It is March 4th. Let's check in on yesterday's market vitals. The major indices all dropped in early trading as much as 2.5% before paring losses. Still, they ended the day firmly in the red. Meanwhile, treasury yields spiked again and the price of oil rose as much as 9% before pulling back on those gains. Okay, what's happening? As war with Iran escalates, so do investors anxieties. The major indices sold off yesterday morning as the US Warned that its strikes on Iran will continue to ramp up in force. Brent crude, the international benchmark, briefly hit $85 a barrel for the first time since 2024. Then President Trump said the US will escort and provide insurance for oil tankers moving through the Strait of Hormuz. The indices recovered some of their losses on that news, and crude retreated from its highs still, oil prices are up 13% over the past week. In the bond markets, the 10 year treasury yield moved higher on fears that higher energy prices could boost inflation. In the U.S. meanwhile, the risk off trade spread overseas with European stocks falling 3% and Asian markets slipping. South Korea's Cosby plunged over 7%. Investors rushed to safe haven currencies. The dollar rose to its highest level since January and the Swiss Franc hit a 10 year high against the euro. Tons of stuff in here, tons to unpack. And so we're going to do something different today. Instead of going to one guest, we are going to go to three guests. We've got our panel of experts here today. We're speaking with Mark Zandi, chief economist at Moody's analytics, who you know, Robert Armstrong, US Financial commentator for the Financial Times, and Matthew Martin, Semaphore's Saudi Arabia bureau chief. Mark Rob Matthew, thank you very much for joining me on the show. Rob, I'm going to start with you. We've seen some interesting reactions here from the markets. Specifically, it seemed that people weren't that worried on Monday and then on Tuesday, maybe more worried because suddenly stocks sold off. What do you make of how the markets have reacted so far?

[Robert Armstrong]

It seemed pretty clear on Monday morning that the market was pricing in a short, tidy little war, something on the style of Venezuela regime change, light where you strike or kidnap or whatever and it all ends fairly briskly. I think the market is still pricing in some of that, but as Iranian resistance has proved a bit more resilient than expected, that has to show up in things like crude prices and by extension inflation expectations. That in turn means that stock prices are creeping down again. Nothing like the worst case scenario is being priced in right now, Ed, But a slightly worse best case scenario is what I would say is priced in.

[Ed Elson]

Now, Matthew, you are the only one of us who's actually in or around the region right now. What are you seeing in the Gulf and does Rob's view of what investors are pricing in make sense to you?

[Matthew Martin]

Yeah, look, I think it does. I mean, I've been, look, I'm based in Riyadh today. I've been out and about in the city. You know, generally people are still going about business. You know, went out to dinner with some people this evening. You know, obviously the war is a topic of conversation, but it's not like it's not the only topic of conversation. People are still continuing to talk about other things. And I think that is kind of reflective in what you're seeing in markets and that, you know, it is a factor, but it's not the number one thing that people are thinking about. And so, you know, I think, and also, you know, within the region, I think people are taking this very, very differently as well. I mean, if you look in Dubai, you know, there are some people who have been in buildings which have been struck by Iranian drones who never expected that they would live through something like that and are panicking about it and are wanting to leave. And depending on, you know, you could live in other parts of the city and have no idea of what's going on and be pretty isolated from it as well. So, you know, I think that sort of goes into this kind of psychology of how people are responding to it. You know, some people are thinking this is going to be really significant, this is going to be dramatic and long lasting. And some people are kind of taking a much more sanguine view of it.

[Ed Elson]

Mark, it sounds like people are worried about this, but not maybe as worried as we would have thought a week ago, a month ago. If you told us what the headline actually is. What do you make of investor reactions?

[Mark Zandi]

I think the description that Rob gave is dead on. I think people are still, investors are still expecting this thing to blow over pretty quickly. Maybe it's not going to be in a day or two like Venezuela, but more like a week or two. So if that's the case, then $10 on a barrel of oil, you know, a couple, 3 percentage points off stock prices, bond yields up a little bit, you know, that kind of consistent with that perspective. And I think that's, that's kind of my sense of things. I mean that would be my kind of baseline view down the middle of the distribution of possible outcomes. Now the distribution is, is wide. There's a lot of ways this can go. And if this does drag on beyond a week or two into a month or two, then we're talking about different kind of scenario. And I think the market reaction would be much more severe. But right now I think people are a little disappointed. Maybe this was going to be Venezuela and it didn't turn out to be that way. But I still think people are holding onto a week or two. So in that context, this kind of market action is pretty close to what you would expect.

[Robert Armstrong]

One thing, Ed, if I may just follow up on that, is what I would have your listeners be alert to if things do get worse is the relationship between stocks and bonds, which is really interesting here. If you get positive correlation between the two, that's bad, right? One of the Things we like to happen in our portfolios is that when the stocks go down, the bonds go up and vice versa. But, but an oil price shock like you might get if the Strait of Hormuz is stuck closed for a while is inflationary. So the bonds can't go up when your stocks go down. Right. And so it's been interesting that they've been going down together. And that's a painful scenario. That's stagflationary and that is, that's kind of the pain point to watch, I think. I don't have any predictions. I don't know anything about wars. I don't have any predictions for what's going to happen. But that's the thing that kind of worries you about this particular flavor of conflict.

[Ed Elson]

Yeah, Mark, there are pretty significant implications, it seems, for consumers here, and that is we put oil in our cars and most of the oil is coming out of this region. What actually is the relationship between what is happening in Iran right now and how that would impact our lives and prices at home?

[Mark Zandi]

Well, I give you some rules of thumb. So if oil prices are up, stay up 10 bucks a barrel. So on WTI West Texas Intermediate, which is the key price in the US was 65 bucks a barrel before all this. Now we're 75 bucks a barrel. I'm rounding obviously, but say it's 10 bucks. That would, if it sustained for two, three, four weeks, will sustain an increase in the cost of regular unleaded by about 25 cents. So right now the US consumer nationwide is paying about 3 bucks for a gallon of regular unleaded. It'd be 3 buck 25. You know, that's manageable but a bit uncomfortable, particularly in the context of all the affordability concerns that Americans are facing right now. Everything else is up in price. The only thing that wasn't was the cost of a gallon of regular unleaded. And now it's also headed up. And of course, if it's going from three to 325, the next question is, well, is it going to go to 350, 375 and then that's real money. So you know, it's moving in the wrong direction. It's going to make already very anxious Americans even more anxious. And in this case, the other pernicious aspect of it is, you know, a higher gas price doesn't matter at all for a high income, high net worth household. They don't really, you know, it doesn't matter if they're paying a quarter more for a gallon of regular unleaded, but it means a lot for lower and middle income Americans. I mean, that's real money. And if you add it up over a year, it's 2, 300 bucks an addition, 20 bucks a month. And that's pretty tough for people that are in that kind of situation. So there's a lot of aspects of this from the prism of the American consumer that make it more uncomfortable than it typically would be just because of where we are on this affordability issue.

[Ed Elson]

Stay tuned for more of this panel right after the break. And for even more markets insights, you can subscribe to my weekly newsletter. Simply [e-mail] substack.com.

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[Ed Elson]

We're back with our panel. Matthew. When I look at the international markets, Korea's market down, Germany's DAX is also down. FTSE in the UK on track for its worst day in almost a year. What is kind of interesting here is that it seems that the concerns are more exacerbated outside of the US Perhaps because of proximity to the region, perhaps because of what that will do to energy. I mean, why is that? How do we account for the difference here?

[Matthew Martin]

Well, I think probably a big part of that is going to be the impact of gas prices in particular, because, you know, we've seen the, the attacks on the Qatar energy facilities and the shutdowns that they've had. I mean, that's led to huge increases in the gas price, which is obviously that's a big part of the feedstock that's going into Europe and is going into Asia. Well, and Qatar has become a huge producer of gas. So that's going to feed immediately into a big inflation problem for a lot of those economies. So I think that's really what is at the root of the way that those markets are digesting this.

[Robert Armstrong]

Yeah, the difference between Henry Hub gas here in the United States and European natural gas is striking. You know, our Natural gas is up 6, 7% or something like that. Mark may know better than me. European gas is up like 40%. And especially Germany is an extremely gas sensitive economy.

[Mark Zandi]

So, you know, the other thing, Ed, is that the US Produces a lot of oil, right? I mean, at the end of the day, the US Produces as much oil as it consumes. So consumers get nailed. But you know, producers benefit not immediately, but over time if prices remain high and persist. But in many of those other countries, they're full on consumers. They don't produce any energy. So there's nothing but negative here. So you have these differentials across the globe because of the fact that the US Is now the largest oil producer on the planet.

[Ed Elson]

Right. Which brings up questions of how insulated from all of this actually are we, and perhaps we are quite insulated, but it's kind of an interesting dynamic because it was us who launched the attack in the first place. So does that essentially mean that we can kind of do what we want over there in Iran and we aren't particularly affected? I mean, let's look at like liquid natural gas, for example. What kinds of effects, Mark, would an increase In LNG prices over in Europe, would that have much of an effect on the us Would that be a problem? Is that part of the calculus for people in the administration by now?

[Mark Zandi]

Well, I think that's second order, third order. I mean, don't get me wrong. I mean, I think the effects most immediately and most significantly are negative for the U.S. there's no doubt about it. Consumers, American consumers, low middle income households, the folks that vote boat, they're going to feel this right away and it's going to affect them in a significant way over time. The higher oil prices might lift investment in production in the oil patch and offset some of the negatives. But this is still soundly negative. But the fact that natural gas prices are rising in Europe has effects on Europe, obviously, and then that reverberates around the world in the form of weaker economic growth. But that's, I view that to be more second, third order as opposed to, you know, the initial things that we should be worried about.

[Robert Armstrong]

I don't think we have enough export infrastructure to really make hay off Europe's price problems. We'd like to have more export terminals and so forth. We just don't have them. I mean, I think, I think the point of connection to US markets for US investors and how we feel it is going to be the Federal Reserve, right? So last week we got two unpleasant inflation prints in the form of pursuit producer prices. Prices paid was high and then we had the ISM manufacturing report and their prices paid reading was bad. And so already you can sort of see the Federal Open Market Committee thinking, geez, maybe these, these were cutting rates might now not be so smart. And then you get another inflationary element into the picture which is gas prices going up, which feed into food prices and have a big effect on sentiment, you know, inflation expectations, maybe those rate cuts come off the table. And you know, it's a horrible thing when there is something as serious and mortal and morally important as a war going on and you're sitting here talking about what a bunch of nerds in Washington are going to do with interest rates. But you know, this is what they pay me to do. I'm not saying this is the most, I would never say this is the most important thing about what is going on right now. But the fact is where US investors are going to feel it might be through rate policy.

[Ed Elson]

Right.

[Mark Zandi]

You know, the other thing, Ed, the way to think about it is, you know, the US economy has been hit by three negative supply shocks in the last year, first being the tariffs, right? That's inflationary and weakens growth. Then it's the immigration policy, heavy handed immigration policy, that raises costs and reduces growth. And now you've got these higher oil prices. So the US Economy has been pretty resilient, you know, kind of managing through those other shocks. But you got to ask yourself, myself, the question, at what point does this all kind of feed on itself and become too difficult to digest?

[Ed Elson]

That's exactly my question. And I think the thing that is striking is when I look at having spoken with people who work in energy or who consult in energy and having spoken with investors, there seems to be this assumption that this is not that big of a deal. And maybe that's right. But it seems in this discussion that there are so many larger implications here that could be actually quite rattling. There's also the question of like, is the situation in Iran even resolved? And it seems to me there is almost no clarity on that question. In which case it seems that there is actually pretty enormous tail risk here to the downside that is not, not quite being reflected in markets right now. I mean, you look at the price of oil, which has gone up, but it hasn't gone up that much. People were saying it was probably going to hit $100 a barrel. That isn't really happening. Which tells me that investors say this is contained, this is only going to happen in a small region. It's not going to affect us much and it's not going to affect other nations that much. I'll take their word for it, but I'm just a little bit skeptical of it. Perhaps, Matthew, you could provide some clarity on this question for me. I mean, I get the sense that maybe we're underrating the gravity and how much this could affect all of us.

[Matthew Martin]

Yeah, look, I think if you look at what's happened over the past couple of years since the October 7 attacks on Israel and this heightened geopolitical risk in the Middle east, markets have reacted and largely shrugged it off quite quickly and generally been rewarded for taking that view. And I think, you know, that's the position that people are going into, into this time with that same sort of view that we can shrug this off and this is maybe something that's going to be a couple of weeks of disturbance to markets and then there'll be some sort of reconciliation, some sort of ceasefire compromise and everyone will get back to business. I think given, you know, that's very easy to say if you're sitting in New York or London, if you're sitting here and watching, you know, buildings around you, you know, hotels that you have, have been in and stayed in and restaurants that you've eaten in blowing up. Then, you know, you, you feel quite differently about it. And, you know, I think this is the real risk of this, is that actually I see this. There's a very, very significant chance that this goes on a longer term.

[Ed Elson]

Right.

[Matthew Martin]

That we see a lot of problems with getting oil out of two markets and that is going to push prices up higher than we're seeing them already. You know, not to account as well, of course, the, you know, the human catastrophe that's going to be happening here as well. So, you know, I think that this, that there are a lot of tail risks here that I don't think the market is quite accepting and quite pricing in at the moment because it's taking this optimistic view that this all resolves itself in the next sort of 10, 15 days.

[Ed Elson]

Right. I think that maybe one way to look at it, it's like, is the world more or less certain than it was a week ago? And that to me, seems to be the question that investors are not totally in agreement upon. Some people would say, I probably would say the world seems less certain to me at this point. Others would say, no, we've taken action, it was conclusive action, and the world is more certain In Saudi Arabia right now in the Gulf. What would you say the consensus is on that question?

[Matthew Martin]

I think that the next couple of weeks is going to be very, very uncertain, I think. Okay, so last week the big question was, is the US Going to invade? Is this going to launch a strike? Okay, we know that that has happened, but it doesn clear that there is a very political strategy about how this conflict proceeds from now. It doesn't seem very clear from the Gulf states about how involved they're going to become in it. It's obviously very unclear how the Iranian regime is going to respond. I mean, I think the forcefulness of their response is one of the things that has caught everybody by surprise. And the fact that you have seen these attacks on Gulf states as well. So I think that uncertainty should be pricing a much higher degree of uncertainty now than they were.

[Mark Zandi]

I like the way you framed it in terms of the uncertainty. I think, though, what's happening is that investors are still kind of in the middle of the distribution of possible outcomes. And that's still. Even though the distribution of possible outcomes is pretty flat, you got fat tails. They're still in the middle because we're only a couple days into this. But if that goes on for another week or two or certainly three or four, then you jump to the tail and then you get the kind of scenarios you're talking about. Then you see the big consistent declines in prices across all asset markets. And Rob made a really interesting point. Prices are down for everything. Not just stocks are down, bonds are down, gold is down, crypto's down. The only thing that it's all got to be going into cash. Right. So that is an indication that people are nervous about what's going on, but they haven't jumped yet. But we will jump if this goes on for any length of time.

[Robert Armstrong]

The market was fragile going in. Right. That because of the AI stuff, the market was expensive and jumpy on the way in.

[Ed Elson]

Right.

[Robert Armstrong]

I think one thing that is something to watch that several of my colleagues who work on the oil side and analysts who work on the oil side have talked to me about is the crucial question of damage to infrastructure in the Gulf. We all like to talk about the choke point that is the Strait of Hormuz because it proves we can look at a map. But you know, you can close the Strait of Hormuz, you can open it.

[Ed Elson]

Yeah, right.

[Robert Armstrong]

It doesn't disappear. But if refineries, ports, water, desalinization plants that provide Matthew with his drinking water, if Iran can really damage these bits of infrastructure, that is lasting damage, not something that can be turned around in a week. And so I think, think the fact that that hasn't happened yet. There's been a hit on a Saudi refinery, but I think it was a contained hit. Matthew will be able to correct me on that. But that is something that would change the game. A devastating hit on, on infrastructure in the Gulf region would be, would change the scenario and make things look much uglier, more frightening, more uncertain.

[Ed Elson]

If that happens, Rob, what is the safe haven? Because to Mark's point, gold is down, bonds are down. I mean, it seems to me that the flight to safety is going to just be that's the trade of 2026. People are not interested in speculation. They want safety of all kinds, including financial safety. What even is that they can't buy

[Robert Armstrong]

Treasuries because of inflation. I mean, it leaves you with the dollar and gold and gold's been jumpy because it's so expensive already. You wish gold wasn't so expensive going into the situation all time high in inflation adjusted terms already. So it really is the dollar and it is kind of putting, you know, putting behind us this view that the dollar is dead. I think you're going to find if we get a proper global crisis, the greenback's going to be pretty appealing for people as a place to wait it out.

[Ed Elson]

Does that make sense for you as well, Mark? Is that what you're seeing?

[Mark Zandi]

I think people are going into cash. I mean, the dollar is, is. It's up a little bit, but I wouldn't say it's still down quite a bit from where it was a year ago. I don't think it's the safe haven that it was. I don't think there's anywhere to hide. And one of the reasons to be more nervous about all of this in the current context is the valuations are high across all asset classes. I mean, there's been some correction in crypto, but still, Bitcoin's what, $68,000 a coin? So gold is, as Rob pointed out, it's still very high. Silver is still very high. Corporate bond spreads are still very paper thin. Equity prices or valuations are extraordinary. So again, that raises the potential that you get out onto those fat tails that you jump from the baseline to kind of in the middle of the distribution. Everything's okay. Well, it's not okay. And there's nowhere to hide because the valuations are so high. And it all goes into cash. It's just all good into cash.

[Robert Armstrong]

It's not a great setup.

[Sponsor/Announcer]

No, it's not a great setup.

[Mark Zandi]

It's not a great setup.

[Ed Elson]

All right, Mark Zandi, Robert Armstrong, Matthew Martin, Gentlemen, really appreciate your time. Thank you.

[Robert Armstrong]

Pleasure.

[Matthew Martin]

Thank you.

[Mark Zandi]

Thank you.

[Ed Elson]

Okay, that is it for today. We appreciate you joining us for another Prof. G Markets panel. If you have a guest you think we should speak to on this topic or any other, please drop us a line in the comments or email our Producer, [e-mail] We hope to hear from you. This episode was produced by Claire Miller and Alison Weiss, edited by Joel Patterson and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is dad Shalon, Isabella Kinsel, Kristen o' Donoghue and Mia Silverio. And our social producer is Jake McPherson. Thank you for listening to Profit Markets from ProFT Media. If you like what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.

[Sponsor/Announcer]

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