This Week in Review | Middle East Conflict, US Inflation, Tariff Update (Apr. 10, 2026)

The episode begins with news of a conditional two-week ceasefire agreement between the United States and Iran, contingent on reopening the Strait of Hormuz. This development helped calm markets after weeks of volatility, with stocks rallying and oil prices dropping sharply. However, the hosts emphasize that markets had already begun moving before the announcement, illustrating their forward-looking nature and focus on 3-30 month expectations rather than minute developments. They argue that broader economic conditions like steep yield curves and political gridlock remain the key drivers for corporate earnings and stock performance. The discussion then shifts to US inflation data, with March's Consumer Price Index showing headline inflation rising to 3.3% year-over-year from February's 2.4% - the highest reading since 2024. While this represents a material increase, it was in line with expectations and therefore likely already priced into markets. The hosts caution against reading too much into a single month's data, noting that current inflation levels remain around the long-term average of 3% and that inflation is fundamentally a monetary phenomenon driven by central bank actions rather than energy costs alone. The final segment reflects on the one-year anniversary of President Trump's 'Liberation Day' announcement, when he declared a national emergency over the trade deficit and imposed sweeping tariffs using the International Emergency Economic Powers Act. Initially, this caused dramatic market drops of over 11%, but stocks recovered fully within about five weeks as the actual impact proved less severe than anticipated. The Supreme Court later struck down the reciprocal tariffs, though markets barely reacted by then. The hosts conclude that tariff impacts have largely been priced in and have lost their ability to surprise markets.