March 12, 2026
By Peter Bower
The war with Iran is driving energy prices much higher than anticipated. Iran is using a very powerful tactic by closing the Straight of Hormuz. Twenty percent of the world’s energy supply must pass through this strait. The U.S. and the West are very vulnerable. Even the ability to transport oil through pipelines to the Red Sea will not work for long. Ships are being fired upon by the Houthis of Yemen. They are closely aligned with the Iranian regime. Soon, this avenue may close, too.
Unless the strait can be opened and ship traffic restored, this choke point will serve to drive energy and other prices higher and higher. With it, inflation and interest rates may also increase. Many investors going into this new trading year assumed that interest rates would decline further this year. The President has made it a priority. He nominated a new Federal Reserve Chairman whom he feels will help fulfill that objective. The only question seemed to be when and how quickly. Rates going higher were not in the cards.
Higher Interest rates and inflation will not be good for economic growth. Expect growth projections to come down soon. If the oil and gas do not begin to flow out of the Persian Gulf soon, we may suffer a stock market correction. The Bull and his partners are watching this intently. In the meantime, growth stocks that are less sensitive to inflation and low growth are back. They are leading the stock market again. The Bull and his partners will do what is necessary. In the meantime, stay steady my friends.
-The Lonely Bull
