When U.S. president Donald Trump announced the assassination of Qassem Soleimani, leader of Iran’s overseas military, western markets wobbled. No wonder. Oil prices initially jumped nearly 5%.

And what any trader worth their bonus knows—and a diminishing number personally remember—is that when Middle Eastern tensions created an oil price shock in the 1970s, the consequence was American stagflation.

This experience of high inflation and unemployment coupled with stagnant demand was so unpleasant that it is usually presumed that U.S. politicians want to avoid unleashing a repeat by creating oil price rises that hit consumers at the pump, especially leading up to a presidential election.

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