``` The "three-digit oil price crisis" is quietly approaching—has the market underestimated the energy shock? ```

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Oil prices reach triple digits, triggering a global selloff in stocks and bonds, placing the Federal Reserve in a dilemma.

With ongoing U.S.-Iran conflicts, surging oil prices, weakening employment data, and renewed inflationary pressure, triple threats strike simultaneously, causing investors’ concerns about U.S. "stagflation" to quickly evolve from theoretical speculation to a real menace.

On Monday, Brent crude prices soared past $100 per barrel, reaching the highest level since the outbreak of the Russia-Ukraine war. Meanwhile, U.S. retail gasoline prices have surged above $3 per gallon and continue to rise. On social media, Trump commented that the rise in oil prices is a "small price to pay" for winning a war, but whether voters will accept this statement remains unknown.

Global markets suffered sharp turbulence. Asian stock markets continued their decline, with the Nikkei Index plunging more than 5% in a single day, and Korea’s KOSPI fell nearly 6%; the prior week saw drops of 5.5% and over 10%, respectively. Bond markets were also under pressure, with yields on British two-year government bonds posting their biggest single-day rise since 2022.

Triple-digit oil: Energy crisis escalates

The energy crisis triggered by the Iran war is accelerating. On Monday, crude prices broke through the $100 per barrel mark, the first time since the 2022 Russia-Ukraine war that this psychological threshold was reached.

Structural pressures in supply are pushing prices higher. Gulf oil-producing countries continue to cut production, compounded by Iran’s ongoing threat to the Hormuz Strait—a vital global oil shipping channel—fuelling persistent fears of supply disruptions. On the geopolitical front, Iran’s hardline figure, the son of Supreme Leader Khamenei, Mojtaba Khamenei, has been appointed the new Supreme Leader, further narrowing the window for easing tensions.

With oil prices surging, the market’s focus shifts to potential interventions by various countries. According to Reuters, G7 finance ministers plan to discuss a coordinated release of emergency oil reserves. U.S. Senate Democratic leader Schumer is urging Trump to tap strategic oil reserves, though Trump has not yet responded. Analysts point out that even if reserves are released, as the crisis deepens, the effectiveness and duration of relief remain highly uncertain.

Stagflation risk: Central banks face worst-case scenario

This round of oil price increases comes at a particularly tricky time—coinciding with disappointing U.S. jobs data. Last Friday’s Nonfarm Payroll report for February was unexpectedly weak, though some analysts attributed this to adverse weather, the report overall lacked positive signals, showing signs that the labor market is stagnating.

The combination of these two factors has abruptly raised stagflation risk. As economic growth slows or even contracts while inflation continues to climb, central banks face the policy dilemma they least want: rate hikes further suppress a weakening economy, while rate cuts could unleash uncontrolled inflation.

Reuters analysis suggests that the Fed and other major central banks are most likely to do nothing and extend their wait-and-see period. However, this option satisfies no one: market participants hoping for rate cuts to boost the economy will see the window for policy easing narrowing; meanwhile, investors worried about inflation will find little confidence in central bank silence.

Flight to safety: Dollar strength, gold loses luster

Amid intertwined uncertainties, investors’ risk-aversion logic is quietly evolving. The dollar sustained last week’s strength, its liquidity advantages reaffirming its status as the preferred safe haven.

Notably, traditional safe-haven asset gold is losing its shine again. The strong dollar and rising yields on U.S. Treasuries are a double burden, keeping gold prices from rising in tandem with geopolitical risk.

On the political front, pressure from oil prices is starting to affect the Republican Party internally. Reuters analysis finds that the biggest jumps in gasoline prices are in the Midwest and South, including swing states supporting Trump in the 2024 election. As the November midterm elections approach, persistently high energy prices may become a crucial political variable for Republicans.

Risk Warning and DisclaimerThe market is risky; investment requires caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment goals, financial situation or needs. Users should determine whether any opinions, views or conclusions in this article meet their specific circumstances. All investments are at the user’s own risk. ```