Fed Rate Decision: Could $100 Oil Revive Hike Risk?

Oil kissed triple digits again and suddenly the July 29 Fed meeting does not feel like a snoozer. Brent settled near $100.69, the highest close since May, and desks perked up.

Futures traders quickly nudged hike odds higher, while Treasury yields climbed to fresh multi‑month highs. Risk assets? Choppy. Everyone is gaming the same question: does $100 oil pull the Fed back toward a hike path it thought it left behind?

Let’s map the moving parts before the microphones switch on in Washington.

Two things hit at once. First, crude broke through a psychological line. Brent closed around $100.69 on July 23, its strongest finish since May, after a sharp intraday push higher Reuters tracked across sessions. Second, geopolitical risk flared. Yemen’s Houthi militia claimed it attacked two Saudi oil tankers in the Red Sea the same day, reviving talk about chokepoint exposure and insurance premia on major routes Reuters.

Rates responded fast. Short and long Treasuries sold off, with reports citing the 2‑year and 10‑year pushing to levels last seen in January 2025 as inflation anxiety crept back in Reuters. By late session, market‑implied odds of a quarter‑point hike at the upcoming FOMC rose into the mid‑30 percent range, roughly 35 to 37 percent per futures trackers Kiplinger.

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