Gate CBO Kevin Lee: Oil prices move first, inflation follows, and the central bank's path is the ultimate variable

Gate CBO Kevin Lee recently published an article titled "War, War Never Changes... How Will the Macro Market Move?" regarding the recent situation in the Middle East. He pointed out that geopolitical conflicts themselves do not alter the fundamental operating logic of the market; what truly determines the medium-term direction of assets is the impact of the prolonged conflict on the inflation path and changes in central bank policy orientation.

Kevin stated that within hours to days after the outbreak of conflict, crude oil typically experiences significant volatility first, as the market prices in the tail risk of supply disruptions; gold then activates, serving both as a safe haven and an inflation hedge; the stock market faces short-term pressure, with VIX rising rapidly and significant sector divergence.

As the situation progresses from several days to two weeks, if energy supply is not continuously damaged, oil prices and risk premiums often retrace, and stocks and crypto assets rebound with the recovery of risk sentiment; however, if high oil prices persist for an extended period, inflation expectations will be systematically elevated, shifting the asset pricing logic from a trading perspective to a macro perspective.

The article further emphasizes that what truly changes the trend is not the market reaction on the day of the conflict but the inflation data and policy expectations that gradually emerge weeks later. Over a longer cycle, the market will reprice around the evolution path of inflation, the credibility of monetary policy, and the economic growth outlook. Historical experience repeatedly proves that in high-uncertainty environments, emotional decision-making often comes at a high cost; understanding the transmission sequence and respecting cyclical patterns are key to navigating volatility.