More Skirmishes in the Middle East Send Oil Prices up Further; The Front End of the Yield Curve Now Pricing in Two Fed Rate Hikes

Warsh has a decision to make: refute or validate the bond market's pricing of two Fed rate hikes ahead

Key Takeaways

• The Strait of Hormuz Is Disputed Once Again: Iran and the U.S. once again traded airstrikes over the weekend, with the skirmishes extending today, sending oil prices higher and undermining the risk-on trade. Tehran has targeted U.S. facilities in multiple countries (Kuwait, Bahrain, Oman, and Jordan) and declared the Strait of Hormuz closed — though President Trump refuted that notion yesterday, claiming that the key waterway was open to commercial traffic.