JP Morgan Lost: Oil at $100 Blinded Washington
The bank said it had "assumed" there would be economic red lines — oil at $100 a barrel among them — that Washington would be unwilling to cross.
JP Morgan Lost: Oil at $100 Blinded Washington
JP Morgan Chase, the largest bank in the United States by assets, told clients Friday it can no longer reliably forecast oil prices — a confession that would have been unthinkable from Wall Street's most powerful institution twelve months ago. The culprit, per the bank's own assessment reported by the BBC, is the Trump administration's escalating military posture toward Iran, which has introduced a category of uncertainty that standard financial modelling cannot absorb.
The bank said it had "assumed" there would be economic red lines — oil at $100 a barrel among them — that Washington would be unwilling to cross. That assumption is no longer holding. Brent crude has been swinging on each diplomatic signal out of the Gulf, and JP Morgan's analysts are now telling clients, in effect, that the next price point depends less on supply and demand than on decisions made in rooms they cannot see.
What makes this significant is not the volatility itself. Oil has been volatile before. What is significant is that a bank whose entire value proposition rests on knowing more than everyone else in the room is publicly admitting it does not know. That is not a market signal. That is a warning about the architecture of the decision-making at the top of the US government.
The Iran file carries no predictable logic right now. When JP Morgan stops pretending otherwise, everyone else should probably stop pretending too.
