MBS RECAP: OPEC Deal Blasts Bonds

Posted To: MBS Commentary

Today brought the long-awaited and hotly-anticipated conclusion of a deal among OPEC countries to limit oil production. Constricted supply has one intention: higher prices. For now, petroleum still fuels trade for the foreseeable future. So a widespread agreement to limit supply (read: raise prices) among OPEC countries has an immediate, quantitative impact on prices. But perhaps more insidiously , it has long-term, qualitative implications for future inflation pressures. This surely wouldn’t have been as big a deal were it not for the fact that markets are already pretty stressed out over the long-term qualitative inflation implications from the inbound Trump administration. Simply put, markets were already relatively freaked out about what fiscal policies might do to inflation, so the…(read more)

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