Oil and the Fed Equation
Oil hovers around $99 amid ongoing negotiations between the U.S. and Iran.
If energy prices remain elevated, inflationary pressure could resurface even as core data cools.
This is why the market cannot focus solely on CPI or PCE.
Oil → Inflation → Fed Expectations → Yields → Risk Assets.
A single variable at the start of the chain can alter how the market prices everything else.
Consequently, the fourth quarter will be about more than just the Fed.
Oil hovers around $99 amid ongoing negotiations between the U.S. and Iran.
If energy prices remain elevated, inflationary pressure could resurface even as core data cools.
This is why the market cannot focus solely on CPI or PCE.
Oil → Inflation → Fed Expectations → Yields → Risk Assets.
A single variable at the start of the chain can alter how the market prices everything else.
Consequently, the fourth quarter will be about more than just the Fed.