Stagflation Dead Ahead From Global Oil Price Shock | Chance Finucane, @OxbowAdvisors ​

**Chance Finucane** (0:00)
You're in this very short-term period here where we're cycling through the tariff announcement from a year ago, where it feels like we've got higher year-over-year economic growth, but we would expect that to turn back to a growth deceleration within a couple of months, and you're back to this sort of stagflationary type environment for the next couple of quarters.

**Adam Taggart** (0:26)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Welcome you here for a conversation with Oxbow Advisors Chief Investment Officer, Chance Finucane. Oxbow Advisors is a high net worth advisory firm founded by Ted Oakley, who you've seen me interview a lot in this channel, that specializes in servicing high net worth clients, but we'd like to get Ted and his cohort there, Chance, on this program as often as we can. Chance, thanks so much for taking your time, taking time out of what I know is a very busy period to come talk to our viewers here.

**Chance Finucane** (0:58)
Yeah, it's always great to talk to you, Adam.

**Adam Taggart** (1:01)
Well, thanks, Chance. All right. Well, look, it's not like there's much going on in the world to talk about.

**Chance Finucane** (1:06)
No, not at all. Yeah, it's interesting. We're talking on Monday morning here, and there's not even that much movement in the market anymore when there's big geopolitical news happening over the weekend. So it seems like markets are pretty used to this over the past month and a half.

**Adam Taggart** (1:20)
Well, yeah. So I was being facetious, but that last point is actually pretty accurate, I think we're seeing the volatility of the market's reaction to all the different back and forth going on here with the Iran war. I don't know if it's just exhaustion or if it's the market's confidence that we're getting closer to a predicted outcome that is reducing that volatility. Now, in the day we're talking going into this past week, so it's a Monday, as you said, on Friday going into this weekend, Iran had declared that the Strait of Hormuz was open totally, completely open, I think was their words. A lot of positive tweets from the president or truth socials from the president saying this thing is pretty much wrapped up. Then, of course, everything changed over the weekend, which ended up with the Iranian, I don't want to say the Navy, but some of their ships firing on some, I think, Indian ships, closing the straits, and then the US stopped and boarded an Iranian vessel. Obviously, things are escalated.
This is while the envoys from both countries are going back to negotiate a second round in Pakistan. Still a little un-clarity as of the time we're talking, whether the Iranians are even going to show up for that or not. So, I mean, there is a lot of continued uncertainty here, but the markets, as of Friday, we're at all-time highs.
They're off not that much today, given all the uncertainty here. Oil has come down pretty substantially from its high, still elevated, but only up about 5 percent today, which would normally be a big move in the oil markets, by not nearly as much as how oil has reacted on certain days over the past couple of weeks here. So I guess, let me ask this question, and then I'll zoom up to an even higher level. But in your opinion, Chance, does it seem that the market is pricing in a relatively near conclusion to this conflict in Iran one way or the other?

**Chance Finucane** (3:27)
I think you're right. I think it's pricing it maybe, I don't know if they know the exact timeline, but they want to look out far enough to where a ceasefire or some sort of peaceful agreement or some sort of conclusion is reached, whether that's three months from now, six months, twelve months, and just want to assume that we get back to normal, whatever investors believe normal is, and just want to start investing from that standpoint rather than trying to price in these events that are happening in the interim.

**Adam Taggart** (3:56)
And you know, an important tell, I think, on this is the oil futures market. You don't have to go out that many months before there's really not much of a premium to oil at all versus pre-war, correct? Meaning the oil market doesn't believe that these higher oil prices are going to last for that much longer right now.

**Chance Finucane** (4:14)
That's correct. I think especially when you get out by the end of the year, that premium starts to recede quite a bit. And there's still a lot of variability in terms of what an actual barrel of oil is selling for in different parts of the world, different types of crude that you're trying to transact. But yeah, I think the assumption right now in the futures market is, once you get out to December, things look a little bit more like they used to be.