Middle East Tensions Drive Oil Prices Up, Bolstering Fed Rate Hike Expectations

Renewed hostilities in the Middle East have led to an increase in oil prices, reigniting inflation concerns. This development has significantly raised expectations for a Federal Reserve interest rate hike in September, with money markets now pricing in a 67% chance. Consequently, the U.S. dollar has strengthened, and benchmark 10-year U.S. Treasury yields have climbed to 4.8%.