Michael Gapen

But this price level of oil is not unusual.

So we have passed it through the lens of essentially saying, well, the average consumer, about 2.5% of their spending goes to gasoline.

Lower middle-income households, it's more like 4% to 5%.

It's about double the average.

And so what it's really doing is that shock, that hit to real disposable income and real purchasing power is basically offsetting

the fiscal stimulus that we assumed from the One Big Beautiful Bill Act.

So in some of our prior conversations before the Iran conflict started, we were talking about how optimistic the outlook was for the U.S.

this year.

We've trimmed the sales on that from growth rates that could be above 2.5%, closer to 3% maybe, and thinking, well,

This is just going to offset that fiscal stimulus.

Maybe it's another year of growth around 2%.

But you're getting inflation moving higher.

Maybe we get the Fed cuts that we were expecting.

Maybe we don't.

Maybe the Fed stays on the sideline.

So right now we're saying it's a headwind.

But we need to be watchful, as we were saying, that maybe it becomes a quantity story.

Maybe it does re-escalate.

Maybe oil moves to $125 to $150 a barrel.

And then I think equity markets would look much weaker, sentiment would be worse.