Iran war could lead to U.S. inflation shock, says Allianz’s Mohamed El-Erian

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이란 전쟁이 에너지 가격 충격에서 물가 충격, 수요 충격, 금융 불안정으로 번질 위험을 경고. 원유 배럴당 200달러 가능성, 인프라 피해(LNG·알루미늄·비료·헬륨)와 아시아 실물 부족을 근거로 제시. 미국은 상대적으로 낫지만 절대적으로는 충격을 받는다고 봄. 현재 지수 매수는 피하고 일부 종목만 매력적이라고 언급. 정책 여력 부족과 6% 재정적자를 지적.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. Joining us now for more on the markets, Mohamed El-Erian, professor at the Wharton School and Allianz chief economist. Mohamed, always great to see you. Thanks for having me. So, I mean, if you take a look at the bond market, the cues there seem to be shifting to a concern about growth, concern about longer inflation.

02. Where do you stand on all of this? So, I do think we're going from a price shock to a price shock and a demand shock. And that's the economic logic of all these tipping points that are being triggered in the war. I must say, I'm more worried than the average I'm more worried than the average because of the dynamics of the war.

03. It's an asymmetrical war. You have three parties, now four parties, all of whom believe they're winning, which makes it very hard to end this war. And the US is the only one that they can declare victory, but can't impose outcomes. And I also look at the economy and I'm starting to see demand destruction that can accumulate.

04. And if you go to Asia they're not just worried about higher oil prices, they're worried about actual physical shortages. And that is another tipping point for the global economy. So, in general you know, I've gone from reduced risk to maximum risk off to now a few names look attractive but I would not be going into the market and buying the index at this juncture.

05. When you talk about demand destruction and actually I mean, Asia is talking about shortages. Demand destruction is happening elsewhere outside of the United States. Um, we might be a long ways off from demand destruction. So, how insulated can our economy remain even if elsewhere in the world there is sort of this this greater impact?

06. So, we win in relative terms under virtually any war scenarios. Relative terms don't mean that much the average consumer or to the markets maybe. Right. But so, the question is in absolute terms. I think there's no doubt that we are going to have not just an energy price shock. In my mind, we're going to have an inflation shock.

07. Secondly, we are likely to see that inflation shock translate into less spending, particularly for the lower income households. So, there will be a demand effect. If this continues so, you start with energy shock, interest rate shock broader inflation shock, demand shock then if this continues, which I hope it won't, we're going to be talking about financial instability.

08. So, that's the sequence. Hopefully, we don't we don't go all the way down, but that's the sequence that's been triggered by this war. Um, $200 barrel in oil amongst energy watchers that had always been sort of the outlier scenario, but that outlier scenario seems to be moving a little bit closer and closer as this as this conflict continues, particularly because every day the war goes on, there's an increased chance that there's going to be terrible damage to infrastructure, which would create this um, longer shock to happen.

09. So, how do you how do you think about that in terms of what that would be? Would that be the systemic shock that you're talking about or would it have to be that dramatic? So, the first tipping point happened at the end of the second week when we went from disruption to damage. Damage means the tail is much longer.

10. Yeah. And you heard Cutter come out and say 17% of its LNG exports have now been disrupted for 3 to 5 years. Yeah. There's also been damage in UAE, less so, but but there's been damage and there's also been damage in Saudi, less so, but there's been damage. So, that's the first tipping point. The second tipping point is when we started seeing attacks on other infrastructure.

11. So, aluminum was an example over the weekend. That has resulted in a 6% increase in price. And we are starting to realize it's not just about oil, it's about fertilizers, it's about helium, it's about aluminum. It's there's a whole list of things. So, I do worry that we are going to go to a broader shock.

12. But the next tipping point economically is actual physical shortages. If we start seeing that in Asia that will impact the US. So, the US will now import higher products in terms of prices. And the question is do we now see also a disruption in the availability of products? So, in terms of what markets are not pricing in, do you think that it's I mean, last week at CERAWeek a number of executives, including Mike Wirth of Chevron, had said that the oil markets are not pricing in what is going on in terms of the disruption to energy.

13. Are we not pricing things in in equities? Are we not pricing things in in in energy, in the bond market? I mean, how Where do you go? so, so you heard earlier there's a massive differential between the physical price of oil right now in Asia, 140, 150, and futures. Sure. Okay, at some point you need convergence to happen.

14. Equity, we still have this mindset that this is transitory. That somehow, yes, there's going to be a short-term effect, but we should look through it. And then the third thing we're not pricing in is there's very limited price very limited policy flexibility. We've been bailed out by policy over and over again, whether it was the Fed flooding liquidity or whether it was the fiscal.

15. We don't have those degrees of freedom anymore. There's a real question mark as to what the Fed is going to do and we're already running a 6% deficit. So, you don't the market hasn't quite realized that if this goes on, the policy offset is much less than what we've had before.