Oil Above $100 Creates Fed Policy Trap Amid Softening Labor Market
Oil spiked above $100/barrel due to escalating Middle East conflict, threatening to keep inflation sticky at 3.1% just as unemployment rises to 4.4% with 92,000 February job losses. Markets now price zero Fed rate cuts, leaving policymakers caught between rising energy-driven inflation and clear labor market deterioration requiring stimulus.
The Fed faces an impossible dual mandate conflict that could force policy paralysis, potentially extending economic uncertainty and market volatility through 2026.
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