MarketPR
Fresh developments in the Strait of Hormuz sent oil prices sharply higher, and the move is now feeding directly into the Federal Reserve rate path. Chances of a July hike from the Fed rose alongside the oil price.
The catalyst is geopolitical, but the implication lands squarely on the inflation data the committee watches.
The physical choke point driving the move The Strait of Hormuz sits at the mouth of the Persian Gulf and functions as the primary exit corridor for crude oil moving from the region's major producers to global markets.
It is narrow enough that disruption, or even the credible threat of disruption, moves the global oil price fast and broadly. The latest developments in the strait pushed crude higher.
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