The Strait of Hormuz Is Closed & Inflation Is Ticking Up, So What Assets Are Most Interesting Now?

Today’s Letter Is Brought To You By Figure ! Figure’s building the future of capital markets through blockchain with $20B unlocked in equity. Use Democratized Prime to earn ~8.5% APY, a one of a kind DeFi product where your crypto earns for you against RWA (real world assets). Figure also offers one of the lowest rates on their Crypto Backed Loans at 8.91% @50% LTV. Sign up now and earn $50 when you make your first deposit, earn ~8.5% yield, or take out a Crypto Backed Loan with their low rates today! 1 Claim Your $50 Bonus To investors, The eyes of finance remain on the Strait of Hormuz as Iran attempts to shut down one of the most important logistic channels in the world. We have seen multiple ships attacked in the Strait, including a projectile that hit a Thai-flagged ship and other vessels that appear to have hit underwater mines planted by Iran. This increased pressure in the strait has led individual countries (ex: India) to attempt negotiations with the Iranian government to allow their nation’s ships to pass in the strait. Reuters is reporting conflicting public statements from Iran and India, so it appears there is still significant complexity and confusion. The reason this is important is because the price of oil continues to be highly volatile in response. Over the last five days, oil went from $77 to nearly $120 per barrel, then it went back down to $77, and now sits around $92. This type of whiplash drives uncertainty for investors in the short-term, but it creates concerns long-term about the impact on inflation. We can see in the real-time metric from Truflation that inflation is starting to tick up over the last few days. While the current 1.2% reading is still substantially below the Fed’s stated target of 2%, you have to constantly evaluate the direction of travel more than the current number on any given day. If we dig deeper into the inflation data, Anna Wong (Bloomberg’s Chief US Economist) points out the wide disparity in different regions across the country. There is about 1% inflation in Texas, Oklahoma, Arkansas, Louisiana, Maine, Vermont, New Hampshire, Connecticut, and Massachusetts. But inflation is closer to 3% in states like California, Oregon, Washington, New York, Pennsylvania, Ohio, Indiana, and Michigan. This is a good reminder that inflation is experienced differently by different people. Some of the difference is driven by your local economy and some is driven by your personal spending habits. But regardless of the regional or personal differences right now, we know inflation is starting to tick up. For example, gas prices are now averaging $3.60 a gallon, which is a 62 cent increase since February 28th. This brings us to the question of what assets should you buy in your portfolio to benefit from higher inflation levels? I asked CFO Silvia to give me a breakdown by leveraging the latest AI models to answer the question. 🚨Beating the Bear Market with Anthony Pompliano & Arch Public I am hosting a webinar with Arch Public TODAY @ 2pm ET where we will discuss how to turn today’s volatility into the precise moment high-net-worth investors build their strongest long-term positions. If you are an investor and want to learn different strategies on how to navigate the downside volatility in today’s market, this webinar is for you! Register Here There were four big buckets of capital allocation she highlighted: Real Assets - real estate, commodities, and precious metals Fixed income - TIPS, I bonds, and floating rate bonds Equities - companies with pricing power, energy & materials stocks, value stocks, and dividend growth stocks Alternative assets - infrastructure, farmland, timber, and bitcoin There is no guarantee that inflation is going to surge significantly higher, nor that inflation will be sticky over a prolonged period of time. But if that happens, it will be important for investors to update their portfolio for this new environment that we are headed into. As most of you know, I am less concerned about inflation in the medium-to-long term. I believe the deflationary impact of tariffs, deportations, AI, and robotics are very hard to overcome. But I will change my mind if the Iran conflict stretches into a months-long battle that leaves the Strait of Hormuz closed. Investing is not supposed to be easy. The recent complexity and uncertainty proves that. Best of luck to all of you out there. I will talk to you next time. AI Is About to Trigger Bitcoin’s Next EXPLOSION Tillman Holloway is the Founder & CEO of Arch Public. In this conversation, we discuss the rise of AI-driven investing and how autonomous agents could reshape portfolio management. We also cover bitcoin market catalysts, investor behavior during volatility, and how institutions are positioning across crypto and emerging financial products. Podcast Sponsors Figure – True DeFi Democratized Prime to earn ~9% APY! They also have the lowest industry interest rates at 8.91% with 12 month terms! Take out a Bitcoin Backed Loan today and buy more Bitcoin. Check out Figure ! Figure Lending LLC dba Figure. Equal Opportunity Lender. NMLS 1717824. Terms and conditions apply. 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