Roger Altman, a former U.S. Treasury official and co-founder of Evercore, said Monday that rising crude oil prices could destabilize financial markets.
A rapid increase in energy costs threatens to reignite inflationary pressures, which could negatively impact stock market stability and broader economic growth.
During an interview with CNBC, Altman said "a sharp rise in crude could destabilize markets" [1]. He said the oil market is approaching a tipping point that could create significant problems for equities [1].
Altman said that if crude oil prices climb toward $150 per barrel or higher [1], the global economy could face a severe crisis. He described such a scenario as "the second big inflation shock of this decade after COVID" [1].
The warning comes as analysts monitor the volatility of energy markets and the potential for supply disruptions to drive costs upward. Altman's perspective as a former government official and Wall Street executive highlights the sensitivity of equity markets to energy-driven inflation [1].
While the current market remains volatile, the prospect of a sustained price surge toward the $150 mark [1] would likely force central banks to reconsider monetary policy to combat rising prices. Such a shift could lead to higher interest rates, a move that typically pressures stock valuations.
“a sharp rise in crude could destabilize markets”
This warning underscores the fragility of the current economic recovery. If oil prices spike to the levels Altman predicts, the resulting 'cost-push' inflation would likely erode consumer purchasing power and increase corporate operating costs, potentially forcing central banks to maintain higher interest rates for longer to stabilize the currency.
