Strait of Hormuz, Oil Prices and Fed Rate Hikes: This Is Not an Inflation Problem. It Is a War Problem.

This Is Not an Inflation Problem. It Is a War Problem. The Fed can raise rates, but it cannot reopen the Strait of Hormuz. I wrote about this in my previous pieces, and I will probably have to keep writing about it because the market is still trying to interpret a physical supply problem through the language of monetary policy. The Federal Reserve has now raised rates by 25 basis points, inflation remains elevated, and another hiking cycle is increasingly being discussed as though the central question were simply how far rates need to rise. I think that framing starts too late in the causal chain. The Fed is responding to inflation, but a large part of the inflationary pressure now confronting it is being trans