Oil Rises to $95.70 as Iran Threatens Hormuz Closure
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- Mojtaba Khamenei warned the Strait of Hormuz could stay closed, threatening nearly 20% of global oil flow.
- West Texas Intermediate crude settled at $95.70 per barrel following the warning.
- Interest‑rate futures now price in only one Fed rate cut by year‑end, down from expectations of two cuts.
- Goldman Sachs economists forecast U.S. PCE inflation to hit 2.9% by December and pushed the next Fed cut to September from June.
- Jerome Powell’s Fed chair term ends mid‑May, and Kevin Warsh is slated to succeed him, seen as more dovish on cuts.
- Strait of Hormuz also carries fertilizer shipments, so a closure could raise agricultural input costs and food prices globally.
Why it matters: Higher oil prices lift gasoline and transport costs, pushing food and fertilizer prices up and eroding consumer purchasing power; the Fed now sees inflation above its 2% target, so it may delay further rate cuts, denying borrowers cheaper financing and pressuring businesses with higher input costs.
