Markets deteriorated further as the US threats amount to nothing more than deferred deadlines as Iran digs in its heels. Higher oil prices and an unclear picture of how this war might play out is rattling nearly all corners of the financial markets.

Global stocks and bonds continued to spiral down as the war in the Middle East continues with no end in sight. In this update, I discuss the Fed's dilemma in a stagflation scenario, and how oil prices are likely to affect both headline and cor inflation.