IMF warns of more frequent rises in food and energy prices, and expensive oil reignites fears of a new wave of inflation

The International Monetary Fund (IMF) this week issued a warning that sharp spikes in food and energy prices are likely to become more common. The warning fuels the fear, highlighted by YouTuber and investor Graham Stephan, that the United States is facing a second wave of inflation, driven by high oil levels.

According to Stephan, the mechanism is known: more expensive oil makes shipping, transportation and production more expensive, and this cost takes a few months to reach the consumer. In the presenter's opinion, a large part of the price of a meal depends on transport, be it cargo, ships and planes, and this makes imported food particularly sensitive. The longer oil remains high, he says, the more expensive the bill tends to become.

What the US Treasury says

On the government side, US Treasury Secretary Scott Bessent says the economy is accelerating. It also maintains that inflation and government bond yields, that is, interest rates on American debt, will fall again when the conflict in Iran ends.

Stephan recognizes that there is an argument in favor of this thesis. For him, just as the conflict started quickly, it could end the same way. In this case, he assesses, the current obstacles to prices would dissipate and risk assets could rise strongly, as, according to him, occurred after the announcement of the vaccine and after the tariff agreement. The presenter also mentions the possibility of a 90-day agreement involving the Strait of Hormuz, which, in his opinion, would cause inflation expectations to quickly decline.

The presenter is, however, critical of official statistics. He admits that excluding food and energy from the core consumer price index (CPI) may make sense for tracking purposes, as these items are seasonal and volatile. But he states that the methodology, including replacing products when an item becomes too expensive, allows the figures to be manipulated, which he considers unreliable. His recommendation is to observe your own family's monthly expenses.

Comparison with the 1970s and wealth inequality

Stephan commented on a graph, sent by an analyst on his team, which compares current inflation to that of the 1970s and suggests a new rise ahead, along the lines of the end of that decade. The presenter himself considered that superimposing historical graphs is an unscientific exercise and that repeating the pattern is possible, but not guaranteed. In his assessment, there will not be such a huge spike in inflation if the conflict is resolved.

The video also addresses the concentration of wealth in the United States. According to the graph shown, from 1990 to 2025 the wealth of the richest 1% was significantly different from the wealth of the poorest half of the population. Stephan attributes the phenomenon mainly to the fact that the richest concentrate assets such as real estate and shares, while the base of the pyramid has little disposable income to invest. He points out that it is not possible to attribute everything to inflation: record corporate profits, the advancement of artificial intelligence and the greater participation of retail investors also weigh in.

Regarding gold, the presenter says that the metal can make up a small proportion of a portfolio, but criticizes videos that use alarmism to sell the asset, remembering the premium costs and the difference between purchase and sale prices. For investors, the central message is that the outcome of the conflict and the direction of oil remain decisive variables for inflation, interest rates and stock markets, and that extreme scenarios have not yet been confirmed.

Automatically translated from Portuguese.