Oil-Inflation Nexus Returns as Geopolitical Crisis Tests Fed Policy Framework

Brent crude's surge above $100/barrel amid Middle East escalation is pushing inflation expectations toward 2.5-3.1%, forcing markets to price out Fed rate cuts entirely. The 10-year Treasury yield climbed to 4.23% as investors recognize the Fed faces an impossible dual mandate with energy-driven price pressures conflicting with labor market softening.