The Next Big Move Is In Bonds

For the past few weeks, every headline has focused on one thing: the war in the Middle East.

Tankers are being struck in the Strait of Hormuz. Shipping through one of the world’s most important energy corridors has slowed dramatically. Oil has surged above $90, gasoline prices are climbing, and analysts are now throwing around $120 oil forecasts if the conflict continues.

None of this is good news for the general public.

But here’s what I think most investors are missing.

This inflation cycle didn’t begin with the war.

The war may be accelerating it, but it didn’t create it.

Inflation never truly disappeared after the 2022 spike. It simply became stickier than most economists expected. Central banks managed to slow the rate of inflation, but they never eliminated the underlying forces driving it.

The market has been telling us this story for years.

Precious Metals Moved First

Gold and silver were some of the earliest assets to break out.

That wasn’t an accident.

Markets always discount the future, and precious metals began responding long before the average investor was worried about another inflation wave.

Then came the broader commodity complex.

Copper broke to new highs. Agricultural commodities started waking up. Soft commodities exploded on and off. Rare earths, uranium, shipping, and industrial materials all began participating.

Now, in 2026, the final major piece of the puzzle is joining the party.

Energy.

Heating Oil Is Sending A Message

The first chart compares Heating Oil to the U.S. 30 Year Treasury Yield. 

Heating oil has pushed to fresh highs.

So have long term interest rates.

These two markets have spent decades moving together because they are both responding to the same underlying force: inflation.

As energy prices continue pushing higher, the bond market is beginning to price in a world where inflation remains much more persistent than policymakers hoped.

This isn’t just an oil story.

It’s an inflation story.

Copper Agrees

The second chart tells the exact same story. 

Copper has been one of the strongest commodities in the world, making new highs alongside the 30 year Treasury yield.

Copper is often called “Dr. Copper” because of its connection to global industrial activity.

When copper and energy are both strengthening while long term yields continue rising, it becomes increasingly difficult to argue that inflation is disappearing.

The market is voting.

And it isn’t voting for lower rates.

Listen To The Market, Not The Headlines

The headlines want you to believe inflation is back because of the war.

I think that’s backwards.

Inflation was already here.

The war simply poured gasoline on a fire that had already been burning.

That’s why we’ve seen precious metals, industrial metals, agriculture, shipping, and now energy all emerge as leadership groups over the past two years.

The market has been warning us long before the news caught up.

And right now, commodities and interest rates are delivering the same message.

The inflation cycle isn’t ending. It may just be entering its next phase.

Sam & Jason

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