Oil War Shipping Stall Forces High Borrowing Costs to Persist

Borrowing costs for investors will likely remain high as the Federal Reserve holds interest rates steady. This policy stance is a response to inflation remaining above the 2% target. Year-ahead inflation expectations surged to 4.8% in April from 3.8% in March. Consumer sentiment slumped 10.7% in the same month. These shifts follow the biggest spike in U.S. inflation in four years, driven by jumps in the gas pump price. This price increase was caused by an oil supply shock. Brent crude oil rose from $70 per barrel before the war in late February to more than $119 per barrel at times. U.S. crude oil prices rose to $98.88 per barrel. Shipping through the Strait of Hormuz stalled after the U.S. and Iran entered a war in late February.