Oil broke ninety dollars a barrel after American forces struck Iranian launchers in the Strait of Hormuz — and the second-order effect is the one most people are missing.

American forces hit two Iranian launchers on Larak Island. Officials said Revolutionary Guard forces were preparing rockets carrying sea mines into the strait. Iran then attacked American forces in Jordan. Before the war, about one-fifth of global oil supply moved through Hormuz. Brent futures climbed roughly two percent overnight to clear ninety dollars.

Here is the chain: an energy supply shock feeds directly into headline inflation, and headline inflation feeds directly into Fed policy. Fed Chair Kevin Warsh said Friday the Fed still has work to do if inflation is not moving clearly toward two percent. Markets now price the implied chance of a September rate increase at fifty-seven percent, and the two-year Treasury yield sits near four point three four percent after jumping almost twelve basis points Friday. That is the market repricing a hike, not a cut.

President Trump said Sunday Venezuelan oil from the new American deal will help refill the Strategic Petroleum Reserve. Venezuelan production requires significant capital investment to scale, so it is a multi-year answer to a same-day risk.

Gold is lower near four thousand four hundred thirty-six dollars. Stock futures are flat to slightly lower. Friday's jobs report is the next real test — a weak labor print is the most likely thing to cool hike expectations.

If you trade energy or rates and you think the market has this repricing wrong, make the case in the comments. Correct analysis beats consensus.

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