Binance Research: Oil-driven stagflation fears grip financial markets

Fears of an oil-driven stagflation are gripping financial markets, Binance Research said in a recent report. The report noted that an energy supply shock was triggered by news that the U.S. and Israel had struck an Iranian energy complex, coupled with a de facto blockade of the Strait of Hormuz. This situation was compounded by higher-than-expected U.S. Producer Price Index (PPI) data for February and the Federal Reserve's decision to hold interest rates steady, making the market more sensitive to oil prices. Fed Chair Jerome Powell has stated he will not overlook energy-driven inflation, noting that a rate hike was discussed as an option. A concurrent sell-off is now being observed across the cryptocurrency market and commodities, including gold. Binance Research projects that if the blockade of the Strait of Hormuz continues for more than a month, Brent crude prices could approach $150 per barrel, further intensifying the risk of stagflation.