The Federal Reserve prepares for rate hikes due to the correlation between rising oil prices and renewed inflation risks. JP Morgan forecasts oil could reach 130 USD per barrel, which may push U.S. Inflation to 5%.
Tensions in the Middle East, especially from Iran, threaten oil supply, leading to fears of price surges. Iran’s past threats to close the Strait of Hormuz raise concerns over potential military responses from the U.S. And Israel.
Political pressure is mounting on the Federal Reserve, particularly from former President Trump, advocating for rate cuts. However, amidst rising oil prices and inflation, such cuts seem unrealistic.
Leave a Reply