BlockBeats News, July 17th. The US-Iran conflict continues to escalate, with the US military launching further strikes on Iranian transportation and military supply facilities. Iran has vowed that the Strait of Hormuz will not resume normal navigation, and has demanded that the Houthi armed forces prepare to block the Mandeb Strait, creating a global scenario where the two major energy shipping chokepoints are under pressure simultaneously. Despite the White House's statement that Iran still hopes to reach an agreement with the US, battlefield escalation is happening in parallel with diplomatic negotiations. This indicates that both sides are using military pressure to gain negotiation leverage, rather than truly reducing the risk of conflict.

What the market truly needs to pay attention to is not just the short-term fluctuation in oil prices, but the fact that the global energy supply chain is accelerating its restructuring. Chevron's investment in Iraqi oil fields, Gulf countries' planning of new oil pipelines, and various countries speeding up the establishment of alternative transportation routes all reflect that the energy market has begun to consider "Hormuz risk normalization" as a long-term premise. This suggests that future energy costs may remain at a higher level. Even if some routes are restored, it will be difficult to completely eliminate the supply security premium.

On the other hand, although US retail sales in June were slightly below expectations, core consumption, excluding the energy factor, remained robust. Initial jobless claims have dropped to a new low in nearly two months, indicating that US domestic demand and employment still have resilience. This means that there is no sign yet of the US economy deteriorating enough to force the Federal Reserve to shift to a loose monetary policy.

More importantly, several Federal Reserve officials have once again emphasized that a one-month cooling of inflation is not enough to prove that price pressures have been relieved. Logan publicly supports a moderate rate hike, while Schmid and Vice Chair Jefferson also simultaneously warn that if energy prices re-ignite inflation, policy may tighten again. The market has currently lowered its rate hike expectations due to the recent cooling of CPI and PPI, but what the Federal Reserve focuses on is the inflation risk over the next several quarters, not just single-month data.

From a market perspective, the biggest contradiction at the moment is that while the financial markets are still betting on unchanged policies, the risks in energy supply, capital demand driven by AI investments, and the still robust US consumption collectively form the conditions for a resurgence in inflation. If energy risk continues to grow, the discrepancy between the Federal Reserve and the market's expectations for the interest rate path could further widen, and global risk assets will continue to face a high cost of capital and a pricing environment characterized by high volatility.