Odd Lots · Thursday, October 1, 2026
While market attention often focuses on oil prices during conflicts, Luke Kawa notes that wars and the accompanying defense spending represent a significant, often overlooked, driver of inflationary pressure. He argues that increased global defense spending and efforts to build domestic capacity, like in semiconductors, are inherently inflationary.
“But he points out it's like wars are very expensive. And he's like, Is this like this is a third driver of inflationary impulse that doesn't get much attention. But defense spending rising for years all around the world.”
“Yeah, wars are expensive, rearmaments expensive, trying to reshore and build domestic capacity of semiconductors is expensive.”
“It is the defining feature of this era, like how much we are willing to kind of tolerate the side effects that are in our face every day of policies that are definitely bottom line inflationary.”