U.S. inflation expectations are dependent on the Strait of Hormuz and Bab…

U.S. inflation expectations are dependent on the Strait of Hormuz and Bab al-Mandab. 🔺Ghalibaf, in a tweet, preemptively deemed today’s high-profile decision by the U.S. Central Bank on interest rates as ineffective and wrote: 🔺I wonder if the Federal Reserve can open the Strait of Hormuz or produce more oil by raising interest rates?! 🔺Raising and lowering interest rates cannot anchor U.S. inflation expectations because these expectations are influenced by supply-side shocks due to the blocking of energy choke points, namely the Strait of Hormuz and Bab al-Mandab, and are not connected to interest rates. It is this "Strait of Hormuz risk" that determines the rates, and controlling this risk is currently in Iran's hands. 🔺Ghalibaf emphasizes in this post that the era of managing inflation and inflation expectations solely through demand-side tools (interest rates) is over, and now it is geopolitics that has the upper hand in affecting economic indicators such as inflation.