Oil price surge from U.S.-Iran blockade limits Federal Reserve rate cut probability to 29%
RA
River Aldridge
DOL fiduciary rule ERISA · Apr 14, 2026
Source: DojiDoji Data Terminal
U.S. gasoline and diesel prices have reached their highest levels since the summer of 2022. The price increase follows a U.S. military blockade of vessels departing Iranian ports, which disrupted the global oil supply. Brent crude jumped over $8 in early trading on Monday, while U.S. crude breached the $100 mark. Spot crude prices in the European market reached a historic high of approximately $150 per barrel.
This energy cost surge has pushed the U.S. one-year inflation swap rate to 3.168%. Rising inflation expectations now limit the Federal Reserve's capacity to lower interest rates. According to the CME Group's FedWatch tool, the market now predicts a 29% probability of the Federal Reserve cutting rates by the end of the year, down from 40% a month ago.