WTI has almost reached our next upside target of 106.78-108.23 as things continue to heat up in the Middle East.

The upshot is that inflation remains elevated, forcing the Fed’s to hike interest rates on Wednesday.

The latest odds for a quarter-point rate hike are indicated at 80%. The impact is already being felt in both equity…

…and currency markets, as the yen carry trade threatens to unwind.

It’s horrible timing for Trump, with the midterms just around the corner. This, of course, is the goal of Iran’s refusal to buckle under increasing military and economic pressure.

As much as Fed chair Warsh would like to accommodate Trump, a failure to hike rates at this point would result in a significant loss of credibility.

Stay tuned…