The global asset balance is shifting from interest rates to inflation.

The impact of oil prices on assets unfolds mainly through three channels.

First, rising or falling oil prices mean profit redistribution among different industrial segments;

Second, oil prices influence monetary policy through inflation, affecting the pricing of liquid assets;

Third, significant long-term fluctuations in oil prices often indicate major changes in the global political landscape. Changes in the political landscape have a greater impact on assets than conventional cyclical experiences.

This article focuses on one question: if the oil price center systematically rises after the US-Iran conflict and remains high for a period of time, does it mean a restructuring of the global asset allocation system?

When assessing the inflation and bond impacts after the US-Iran conflict, the market first compares it to the recently concluded Russia-Ukraine conflict.

The inflation impacts on China, the US, Japan, and Europe differ under the Russia-Ukraine conflict.

The severe fluctuations in oil supply constitute the core engine driving inflation up in the US, Japan, and Europe.

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