Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. This article is an on-site version of our Unhedged newsletter. Good morning.

So far, a 10-year Treasury yield of 5.2 per cent doesn’t bother US stocks. The S&P 500 rose Friday and remains right in the trading range it has been in since the beginning of August, when the yield was 4.6 per cent. That economic growth is a major driver of the yield increase certainly helps.

The big risk, as we described on the podcast last week, is that the rapid rise in yields causes some sort of financial accident. But maybe we’ll get lucky! Usually we run interviews on Fridays but the bond market excitement disrupted our plans. Email us: [email protected].

Monday interview: Helen Thompson Helen Thompson is professor of political economy at the University of Cambridge and the author of Disorder: Hard Times in the 21st Century. Her work focuses on energy, geopolitics and the economic pressures reshaping western democracies. She spoke to Unhedged earlier this month about the latest energy shock, China and US energy power, high debt levels and the politics of central bank independence.

The interview has been edited for brevity and clarity. Unhedged: During the post-pandemic inflation surge, people reached for historical analogies to understand that moment. What analogies explain the current energy shock? Helen Thompson: In the 2021-22 energy shock there were some parallels with the 1970s.

In both periods western countries had become accustomed to relatively low oil prices and experienced considerable domestic problems that arose not just from the high energy prices but also from the geopolitical conditions that caused it. But the parallel that should have been drawn was to the oil price shock from 2005-08, which I think is underestimated in the history of the past couple of decades. A great deal of that was China’s demand for oil.

Likewise, the beginning of the gas shock in 2021-22 wasn’t Russia’s invasion of Ukraine but China’s demand for liquefied natural gas which surged in the autumn of 2021. So actually the parallel is one of western countries having to adjust to China’s energy demand, which they haven’t been very good at over this century. Unhedged: What makes the latest energy shock structural rather than temporary? Thompson: From the late 1970s the US took responsibility for guaranteeing maritime navigation through the Strait of Hormuz and out into the Persian Gulf.

While the US had problems projecting military power in the Middle East, it has not had a problem acting as that guarantor. Now we’re seeing the US willing to accept turmoil around transit through the Gulf for months on end and, to some extent, being part of the reason why, given the blockade it imposed on some ships coming out of the Gulf. I don’t think we’re ever really going back to a world in which the US acting as a guarantor of passage through the Strait of Hormuz can be taken for granted.

And you can see that in the way in which various Arab states, including Saudi Arabia, are working on the presumption that they need pipelines. You are going to see Arab states really trying to move as far away as they can from reliance on maritime passage through that body of water. Unhedged: Why has the global economy proved more resilient to the oil shock than expected? Thompson: First, I think a large part of it is China’s demand destruction.

China, in some sense, did prepare, if not exactly for this war, then for a similar war, given the amount of oil stockpiling that it did. The Chinese leadership have a quite good understanding of the geopolitical risks around their energy security and have taken that a lot more seri...