Invictus Oil Price Shock, Stagflation, and AI CapEx Retrenchment Scenario
A severe economic stress scenario exploring what happens when surging oil prices, persistent inflation, elevated interest rates, and a pullback in AI investment collide—creating a prolonged recession without the traditional relief of falling long-term interest rates.
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Oil Shock & Stagflation
- How a severe oil shock could drive stagflation and a recession while long-term interest rates remain elevated
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Pressure on Bank Performance
- Where banks may face simultaneous pressure across borrower cash flows, collateral values, securities portfolios, funding costs, and net interest margin
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The AI CapEx Ripple Effect
- How a sharp pullback in AI-related capital spending could affect CRE, construction, utilities, technology suppliers, private credit, and other concentrated exposures
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