Federal Reserve set to raise interest rates amid oil flow disruptions

The Federal Reserve is poised to raise interest rates for the first time in three years, with markets pricing in an 86% to 92% probability of a 25 basis point hike at the FOMC meeting scheduled for September 16-17, a shift driven by soaring energy costs that are reigniting inflation fears across the board. The 10-year Treasury yield recently touched 5%. Oil is running the show Brent crude has surged past $107 per barrel, with West Texas Intermediate trading around $103. The culprit: escalating geopolitical tensions between the US and Iran that have turned key Middle Eastern energy infrastructure into collateral damage. Saudi Arabia’s East-West pipeline, which handles between 4 and 7 million barrels per day, was shut down following drone attacks. Meanwhile, Houthi forces are ramping up threats near the Bab el-Mandeb Strait, one of the most critical maritime chokepoints for global energy trade. Gold takes the hit Gold prices fell over 1% to approximately $4,290 per ounce as of September 14, marking a five-week low. Gold doesn’t pay interest. When the Fed raises rates, holding dollars or Treasuries becomes more attractive relative to sitting on a pile of metal that just… sits there. H...