Built framework with different oil price levels for central bank reactions. For Fed, sweet spot is $80-110/barrel where they may delay cuts. Beyond $120, growth concerns emerge. Pushed cuts to Sept/Dec due to tariff-induced inflation and elevated inflation expectations.

Energy supply shocks are headline phenomenon, not core. History shows only few basis points transfer to core inflation in US. More concerned about inflation expectations persistence than energy shock transfer to core.

Don't agree with market pricing hikes. Pushed out ECB cuts to 2027 due to more transfer from headline to core in euro area. Risk is cuts delayed or come more quickly if oil moves too high, but don't see hike scenarios unless inflation expectations unanchor.