Should the Fed look through the latest inflationary supply shock?

With the highly anticipated April PCE report dropping this Thursday, all eyes are on how this data will shape the upcoming June FOMC meeting—the very first under incoming Fed Chair Kevin Warsh. Darius explains why investors are falling into a trap of lazy groupthink, assuming current price spikes are entirely due to the US-Israel-Iran conflict. The reality? The US economy is running nominally hot independent of geopolitical energy shocks, and if the Fed looks through these pressures, the risk of a second major policy accident and a second asset bubble in a half-decade is dangerously high.