Middle East energy shock is dominating macro right now — and published research is converging on the view that it's paralyzing central banks.
Researchers broadly agree the US-Iran conflict and Strait of Hormuz disruption is the day's key driver. Multiple analyses flag Brent crude up 20–30% this month, pushing above $91–$95/bbl, with the US strategic reserve drawn down to 1983 lows. One camp of analysts points to extreme backwardation in crude curves as a sign of real physical shortage.
On rates, the published consensus is that tariffs plus energy have pushed US CPI toward 4%, lifting market-implied Fed hike odds above 60% and 10-year yields near 4.63%. The Fed, ECB and BOE are described as stuck "higher-for-longer," unable to ease into supply-driven inflation.
Asia is taking the hit hardest: Japan's June imports jumped 25.4% YoY and USD/JPY broke 163 for the first time since 1986.
Not everyone agrees. A contrarian thread argues the Fed holds through 2026 and that non-US bonds offer better value. One cited projection sees Brent above $120 in Q4 if Hormuz stays shut.
Key catalysts ahead: ECB, FOMC, and BOJ meetings, plus a mid-August ceasefire deadline.