The U.S.-Iran agreement to end hostilities and reopen the critical Strait of Hormuz shipping route has led to a decline in oil prices, but the Federal Reserve’s interest rate outlook has unsettled stock markets.

PULSE POINTS

❓ WHAT HAPPENED: Oil prices fell further on Thursday after the U.S. and Iran signed a deal to end their conflict and reopen the Strait of Hormuz, a vital passage for global oil and fertilizer shipments.📰 DETAIL: The agreement between President Donald J. Trump and his Iranian counterparts aims to end hostilities between Washington and Iran, which previously led to an Iranian blockade of the Strait of Hormuz, spiking global energy prices, and a U.S. blockade of Iran. However, the Federal Reserve’s decision to raise its inflation forecast and hint at higher interest rates has caused volatility in stock markets, offsetting some of the gains from the drop in oil prices.💬 KEY QUOTE: “Persistently high prices are a burden for the American people,” said Kevin Warsh, the newly-installed Chairman of the Federal Reserve, while explaining the central bank’s decision to hold interest rates steady on Wednesday. “This committee will deliver price stability,” he added.🎯 IMPACT: The reopening of the Strait of Hormuz is expected to stabilize oil prices, but the Federal Reserve’s stance on interest rates could dampen investor confidence regardless. Notably, it is expected to take some time before the reopening of the strait leads to a significant increase in global oil supplies.

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