Fed's rate cut expectations are falling…
and oil has a lot to do with it 🛢️

When the price of oil rises, inflationary pressure in the economy increases.
And if inflation heats up again, the Federal Reserve has less room to lower interest rates.

In other words:
📈 strong oil
📉 less likelihood of rate cuts

And why does this matter for the markets?

Because for years, much of the growth in risk assets has been driven by cheap liquidity.

If rates remain high for longer, money does not flow as easily into speculative assets.

But the market is always more complex than a single variable.

Sometimes trading does not move solely due to rates…
but due to expectations about the future.

And that's where interesting movements begin. 📊