Bitunix Analyst: Oil Price Above $100 Signals Institutionalized High Inflation Risk

Huo Xing Finance reports that on July 24, global markets are no longer facing merely escalating tensions in the Middle East, but simultaneous shifts in energy supply, monetary policy, and global capital flows. The U.S. continues to intensify military pressure on Iran, with the deployment of B-1 bombers, Trump considering larger-scale military operations, and the Houthi rebels renewing threats to Red Sea shipping—all of which place both the Strait of Hormuz and the Red Sea, two critical energy transport routes, at risk. After Brent crude surpassed $100 per barrel, markets have begun repricing global inflation risks rather than simply reacting to a one-off geopolitical event. What is truly noteworthy is that rising oil prices have already begun altering the policy functions of central banks worldwide. U.S. initial jobless claims once again came in below expectations, indicating continued labor market resilience and reducing the urgency for the Federal Reserve to ease policy. Meanwhile, rising energy prices have reignited inflation expectations, driving up U.S. Treasury yields across the board and accelerating market bets on rate hikes as early as September—or even sooner. Following the removal of forward guidance by Powell, markets are no longer waiting for the Fed to provide clarity; instead, they are preemptively pricing in policy paths, significantly amplifying interest rate volatility and suggesting that high funding costs may persist longer than previously anticipated. This pressure is not confined to the U.S. The European Central Bank has held steady but has clearly left room for a September rate hike. In Japan, the U.S. Treasury has directly accused the yen of being severely undervalued and urged the Bank of Japan to continue normalizing monetary policy. Rising inflation and higher yields in Japan have prompted markets to reassess the likelihood of Japanese rate hikes and substantial capital inflows back into domestic markets. Should Japanese capital begin reducing its overseas allocations, it could weaken demand for U.S. Treasuries and U.S. equities while further tightening global dollar liquidity. In addition, the U.S. is simultaneously expanding tariff measures, reimposing import tariffs of 10% to 12.5% on approximately 60 economies, thereby raising both energy and trade costs. This means markets will soon face not only oil price volatility but also compounded pressures from supply chain costs, tariffs, and elevated energy prices—collectively increasing corporate operating expenses and making it easier for global inflation to undergo a second-round transmission, further reinforcing the necessity for central banks to maintain high interest rates. For the crypto market, the primary pressure is no longer purely geopolitical but rather the synchronized tightening of real interest rates and dollar liquidity. Rising oil prices fuel inflation expectations, pushing yields to new highs, while major central banks reconsider rate hikes and Japanese capital potentially returns home—all of which subject risk assets to higher funding costs. In the short term, market volatility will continue to revolve around Middle East developments and central bank policies; however, the decisive factors shaping future asset price trajectories will be whether oil prices remain elevated and whether high interest rates gradually become a new normal in global financial markets.