Michael Gapen

But now that positions have been squared, to use the terminology of the industry, and risk is a little more neutral, now markets can afford to look through some of this headline noise.

So the way that we've approached it is to kind of think of the world through three lenses, three possible paths here.

One is kind of the everything goes back to normal and we return to February 27th.

We think that's very unlikely.

We think there has been a structural regime shift in the balance of power in the Middle East and the way oil flows in and out of the strait.

So we're not here thinking, hey, if we just get over this or that, things are going to go back to where they were six to eight weeks ago.

So that leaves us kind of two possible options.

outcomes.

Obviously, there's more than two, but I'm just in terms of trying to think about how things may go.

And one is what I'll call the oil is high, but not too high.

And then the second one is oil moves so high as to create recessionary kind of outcomes.

So there's a non-linearity here where above a certain price, oil becomes really problematic for the U.S.

expansion and the global expansion.

Below that level, it's kind of what I was saying before.

It's about a spike in headline inflation.

It suppresses demand a little bit in the U.S., but the U.S.

economy continues to go and the expansion continues.

After all, we had about $120 per barrel oil at the beginning of the Russia-Ukraine conflict.

That was a slightly different U.S.

economy at that point in time, a lot of fiscal stimulus in the economy, a lot of jobs being added.