Traders work on the floor of the New York Stock Exchange (NYSE) on March 23, 2026 in New York City, USA.
Brendan McDiarmid | Reuters
Citorini Research, the company that spooked markets earlier this year with provocative bearish comments on artificial intelligence, has issued a new warning, this time claiming that an oil-driven economic slowdown could cause stock prices to fall.
Founder James van Zielen said persistently high energy prices risk weighing on consumer and corporate profits, creating a backdrop for stock prices to struggle even as the Federal Reserve eventually moves to cut interest rates.
“If the war doesn’t end, stocks will fall,” van Zielen wrote in a post on Substack early Wednesday morning, pointing to geopolitical tensions as a major factor in oil’s continued strength.
Stocks regained some of their losses and oil prices fell on Wednesday after reports that the United States had given Iran a plan to end the conflict. However, the gap between the two countries appears to be very wide, with the Iranian government rejecting the US’s cease-fire proposal and demanding sovereignty over the Strait of Hormuz.
The latest call builds on Citrini’s growing reputation for contrarian macro views. In February, the company released a widely circulated memo claiming that the AI boom itself could ultimately have a negative impact on the economy, with unemployment rates potentially reaching 10% if white-collar jobs are replaced by machines.
Are you going to slow down from now on?
The core of Mr. Citrini’s current argument is that high oil prices act as a heavy tax on growth, eroding purchasing power and tightening financial conditions without further action by the Fed. Van Zielen argued that since policy rates are already close to neutral, simply leaving them unchanged would be restrictive enough as the energy shock permeates through the economy.
“We live in a different world now, where interest rates are close to neutral,” he said. “If oil prices remain high, it would be enough of a constraint to keep oil prices where they are while oil prices spread throughout the rest of the economy and cause an economic slowdown.”
This dynamic makes stocks especially vulnerable, he said. Even in a scenario where geopolitical tensions quickly ease, Citrini sees limited upside for stocks. He said consumers would still be “slightly weaker” even after absorbing higher fuel costs, reducing the strength of the recovery.
The firm’s view also challenges the prevailing bullish view that rate cuts act as a backstop for stocks. Rather, van Zielen suggests that any eventual easing is likely to occur in response to deteriorating growth, which has historically been associated with further declines in stock prices rather than sustained gains.
“The Fed knows that raising rates won’t magically increase oil supply,” he said, arguing that policymakers are likely to “wait and see” the shock before ultimately cutting rates if conditions worsen.
