Bitunix Analyst: Oil Breaking $100 Is Only the Surface — What Markets Are Really Trading Is the Risk of "Institutionalized High Inflation"

BlockBeats News, July 24th. Global markets are no longer simply digesting an intensifying Middle East conflict—they are absorbing simultaneous changes across energy supply, monetary policy, and global capital flows. The US continues to escalate military pressure on Iran through B-1 bomber deployments and Trump's consideration of larger-scale operations, while the Houthis have renewed threats against Red Sea shipping—placing both Hormuz and the Red Sea, the world's two most critical energy transport arteries, under simultaneous risk. With Brent crude having broken above $100, markets are now repricing global inflation risk itself, rather than merely reflecting a one-off geopolitical event.

What truly deserves attention is that rising oil is beginning to reshape central bank policy functions. US initial jobless claims came in below expectations again, indicating that the labor market remains resilient—giving the Fed no urgent need to ease. On the other side, energy prices are pushing inflation expectations back up, driving Treasury yields higher across the curve, and market bets on a September—or even earlier—rate hike are rapidly increasing. With Warsh having removed forward guidance, markets are no longer waiting for the Fed to hand them the answer; they are pricing the policy path ahead themselves, meaningfully amplifying rate volatility. This also implies that a high cost of capital could persist meaningfully longer than markets had originally expected.

This pressure is not confined to the US. Although the ECB held rates, it has clearly preserved room for a September hike. In Japan, the US Treasury directly named the yen as severely undervalued and pressed the Bank of Japan to continue policy normalization. Japan's rising inflation and higher yields are causing markets to reassess the odds of a BOJ hike—and the possibility that major Japanese institutions could begin repatriating capital. Once Japanese capital reduces overseas allocations, it would weaken demand for US Treasuries and equities, and further tighten global dollar liquidity.

Additionally, the US has expanded its tariff measures—establishing a new 10% to 12.5% import tariff framework covering roughly 60 economies. This means energy costs and trade costs are rising in tandem. Going forward, markets face not only oil price volatility, but also the joint upward pressure on corporate operating costs from supply chains, tariffs, and energy—making global inflation more likely to generate second-round transmission effects and further raising the need for central banks to maintain elevated rates.

For crypto, the biggest source of pressure is no longer purely geopolitical—it is the synchronized tightening of global real rates and dollar liquidity. Rising oil pushing inflation expectations higher, yields at fresh highs, major central banks re-opening the hike conversation, and the possibility that Japanese capital could rotate back home—all of this points to risk assets facing a materially higher cost-of-capital test. Volatility will continue to revolve around the Middle East and central bank policy in the near term, but what truly determines the direction of asset prices ahead is whether energy prices remain elevated, and whether the high-rate regime gradually crystallizes into the new normal of global financial markets.