LFC21
09-11 22:44

Oil moving above $100 is not just an energy story. The bigger concern for me is the potential re-rating of inflation expectations.

If higher oil prices persist, markets may start pricing a more durable inflation impulse rather than treating the move as a temporary geopolitical shock. That matters because it makes the Fed’s job harder and, more importantly, puts upward pressure on longer-dated Treasury yields.

The 10Y is what I’m watching most closely. With the 10 year yield already approaching 5%, another leg higher could put pressure on equity valuations, particularly long-duration growth and technology stocks. 

I remain bullish on energy, but I’m also increasingly interested in utilities and the infrastructure behind America’s power demand. AI is creating a structural need for electricity, transmission, substations and generation capacity. U.S. electricity demand is expected to hit record highs in 2026 and 2027, with data centres an important driver.

So my positioning would be relatively simple: stay constructive on energy and power infrastructure, but be more cautious on long-duration growth if the 10Y continues rising.

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