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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                 April 13, 2026                            *

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*                       e-mail: fiendbear@fiendbear.com                     *

*                    web address: http://www.fiendbear.com                  *

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Fiend Commentary
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The Truce Broke. The Inflation Problem Didn’t.

The weekend’s failed peace talks did more than knock oil back above $100. They reminded markets that the “all clear” they briefly celebrated was never a resolution — it was a timeout.

By Sunday night and into Monday, crude had surged back above the century mark, the dollar was firmer, stock futures were softer, and the old assumption that rate cuts would eventually cure everything was being questioned again. The market is relearning an old lesson: when energy becomes the problem, the Fed’s options shrink fast.

Oil in the low-$100s does not sound apocalyptic. But if it stays there for weeks, it stops being “headline inflation” and becomes lived inflation. It seeps into freight, food, packaging, chemicals, utilities, and every consumer’s sense that prices never really came back down in the first place. The first month is a shock. The second month starts changing behavior. By then, it is no longer a commodity story — it is an economic story.

That is why the market’s confidence looks fragile. Investors are still trying to believe in two things at once:

  • the economy is soft enough that easier policy eventually returns, and
  • inflation will stay tame enough to allow it.

But those two beliefs get harder to hold together when oil is above $100, shipping is still disrupted, and a U.S. blockade of Iranian maritime activity is replacing “peace process” headlines. One can debate whether the next move is diplomacy, escalation, or stalemate. What is harder to debate is that the physical disruption has not gone away.

This is what makes the current setup so dangerous: the economy was already weakening before the latest energy shock. The fourth quarter was revised down sharply. Growth wasn’t strong. It was limping. So if higher energy costs now stick, the drag hits an economy that is already softer under the surface than stock bulls want to admit.

And yet, the Fed is not tightening further. In fact, the opposite pressure is building beneath the surface.

The rate narrative has changed.
The same market that recently flirted with pricing a 2026 hike is back to worrying about eventual easing later in the year. That may sound contradictory with oil over $100, but it fits the broader picture: if growth weakens enough, the market believes the Fed will find a way to support the system.

Which brings us to the quiet part that matters: the balance sheet is already growing again.
The Fed ended balance-sheet reduction in December and began $40 billion per month of Treasury-bill buying under the label of “reserve management purchases.” Officials insist this is not QE. From a narrow operational perspective, fine. But from a market perspective, the distinction gets blurry quickly. When the balance sheet stops shrinking and then expands, liquidity is returning—whether the central bank likes the acronym or not.

At the same time, money growth has clearly picked up. The latest Fed data show M2 at a new record high in February, with the broad money stock up roughly 4.9% year-over-year. Real M2 has also been rising. That does not mean inflation explodes tomorrow, but it does mean the monetary backdrop is no longer “lean” the way it was during the tightening phase. Add in high energy, tariffs, and war-related shipping costs, and it is not hard to imagine inflation looking worse later this year than markets currently hope.

That is why gold and silver still matter, even after their spring shakeout. They are not just “commodity trades.” They are a running vote on whether policymakers will tolerate higher inflation rather than strangle an already weakening economy.

What to watch this week

  • Whether oil holds above $100 even without new escalation
  • Whether the dollar’s safe-haven bounce continues or starts to fade
  • Whether Treasury yields rise because of inflation fear or fall because of growth fear
  • Whether gold and silver find buyers on this reset or continue to act like forced-liquidation casualties

The simple version is this: if the truce had really solved something, oil would not be here. And if oil stays here long enough, the “soft landing plus cuts later” story starts to look like wishful thinking. Markets can still bounce. But the path of least resistance for inflation may now be higher—whether anyone in Washington wants to admit it or not.

                                                                                          

 

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