$BTC

After the weekend US-Iran negotiations broke down, oil prices remain high. As discussed last week, it seems that quickly reaching an agreement with Iran is not in America's best interest; last week's ceasefire news appears to be a localized attempt to stabilize the market. I previously warned that after the ceasefire agreement, the flow of ships through the Strait of Hormuz nearly came to a halt because US crude oil exports had reached a record high in recent weeks, as Asian buyers seek alternatives to compensate for the losses caused by the closure of the Strait of Hormuz. This still severely suppresses global supply. The longer the strait remains closed, the more severe the medium-term impact on the economy and markets.
Last week, we saw CPI data significantly higher than the previous month, mainly due to rising energy prices, while prices in other categories have not yet increased. For a positive market outlook, it is necessary to avoid spillover effects, as they would cause inflation to become sticky. This can only be achieved if an agreement is reached quickly, allowing oil prices to sustainably decline. Sticky inflation means that once the effects of rising oil prices spread to other categories, it will take a long time for prices to fall back. This could put enormous pressure on asset markets, as it might lead to more tightening policies. #美军封锁霍尔木兹海峡
Currently, the market does not expect the Federal Reserve to raise interest rates, mainly because economic growth remains moderate. As previously discussed, if investors start pricing in rate hikes—even if they are ultimately not implemented—the asset markets will face greater pressure. This will happen if oil prices stay high and economic data remains strong. As long as the market does not anticipate rate hikes, even if interest rates remain unchanged, the market can stay relatively stable. Everything in the near term will depend on the direction of oil prices.