📉 Market Snapshot

The United States Oil Fund (USO) dropped sharply today after an initial oil spike tied to rising Middle East tensions. The market rotation reflects expectations of a contained conflict for now.

📈 Rising Risk of Inflation & Disinflation Trap

Oil prices briefly jumped amid fears of disruptions through the Strait of Hormuz. That surge threatens to reset inflation higher at a vulnerable time—consumer disposable income may feel the squeeze and GDP growth could slow.

🏦 Federal Reserve in the Hot Seat

Fed Chair Powell is scheduled to testify before Congress this week. With oil-driven inflation pressure rising, expectations for a July rate cut are waning—forcing the Fed to choose between fighting inflation or supporting growth.

🌍 Global Growth on Edge

Global bodies warn that oil-price shocks could ripple through economies via higher transportation costs and broader inflation. Asia and Europe—heavily reliant on Gulf oil—may shoulder the majority of the immediate fallout.

📊 Strategic Moves for the White House

• Domestic Boost: Increase U.S. drilling and streamline approvals to ease supply tightness.
• SPR Deployment: Tap the Strategic Petroleum Reserve to calm energy markets if prices spike.
• Clear Messaging: Communicate contingency plans and support measures to reassure markets and consumers.