Overview
- Brent crude briefly climbed above $100 per barrel in mid-to-late July, a jump that traders say reflects renewed Iran-related tensions and shipping-route risks.
- Short-term U.S. Treasury yields rose to multi-month highs, with the two-year near 4.37% and the ten-year close to 4.7%, making yield-bearing government debt more attractive than non-yielding risk assets.
- Futures traded on the CME priced roughly a 38% chance of a 25-basis-point Fed hike at the July 28–29 meeting, a sharp reversal from expectations of cuts earlier this year.
- Risk assets felt the squeeze as higher energy costs and yields drained liquidity: bitcoin fell into the mid-$60,000s and miners faced weaker profitability from higher power and fuel costs.
- Policymakers must weigh a supply-driven energy shock that feeds directly into headline inflation without the immediate benefit of new PCE data because the next PCE reading is scheduled one day after the Fed meeting.