Bitcoin dips as oil jumps on US–Iran, dimming Fed cut odds

• Lyla Velez
• March 3, 2026
• News
• 0 Comments

Key Points:

• Oil surge stokes inflation concerns, diminishing chances of imminent Fed cuts.
• Energy costs climb, pushing markets toward higher-for-longer interest rate expectations.
• Geopolitics lift crude, reshaping policy outlook as easing odds retreat.

Oil gains tied to the U.S.–Iran conflict have revived inflation fears and pared back expectations for near‑term Federal Reserve rate cuts. As energy costs rise, markets are rotating toward a higher‑for‑longer policy path.

As reported by Bloomberg, U.S. Treasuries fell for a second day as the oil spike curbed bets on more than one cut, and European bonds extended their selloff. The repricing reflects concern that energy‑led inflation could delay any pivot.

Treasury yields and CME FedWatch show rapid repricing

Treasury yields rose as futures and options markets marked down the likelihood of multiple cuts this year. Based on data from CME FedWatch, probabilities shifted toward fewer moves and higher odds of no change at the next meeting.

At the time of this writing, West Texas Intermediate crude traded near $72.45 per barrel, based on data from Yahoo Finance; MarketWatch estimates that each $10 increase adds roughly 0.2–0.4 percentage points to headline inflation. That pass‑through can keep easing expectations muted if prices stay elevated.

What experts say: Yellen, Goldman Sachs, Brusuelas, Faust

A common thread across policy veterans and Wall Street economists is that an oil shock complicates disinflation and nudges cuts further out. Their views converge on patience until evidence shows inflation re‑anchoring.

Framing the policy calculus, former Treasury Secretary Janet Yellen has argued that tariffs and geopolitics are sustaining price pressures that keep officials cautious. “The conflict in Iran has made Fed officials even more on hold” on cutting rates, said Yellen, as reported by MPAMag.

Goldman Sachs chief economist Jan Hatzius has argued that the oil shock from U.S.–Iran tensions likely pushes back the start of easing, as reported by The Australian. With inflation still above target, he sees supply‑side risks complicating the path to cuts.

As reported by LiveMint, RSM’s Joe Brusuelas warned that higher oil, especially if the Strait of Hormuz is at risk, would reinforce inflation expectations and reduce the probability of cuts; Benzinga quoted former Fed adviser Jon Faust calling the Middle East a “major wildcard” and putting the odds of a cut this year near 50/50, contingent on cooler data. Together, these views underscore a conditional, data‑dependent approach to timing.