Fed's Mary Daly Drops Two Rate Cut Scenarios: Bull Case Exists—If Black Gold Stops Flexing

The US-Iran conflict is making oil prices act like that one degen in your Telegram group who won't stop rage-posting, and the Fed is back to nervously refreshing inflation data. In the March FOMC minutes, the Fed noted that both rate cuts and hikes are priced in—because apparently they're into maximum chaos. Meanwhile, San Francisco Fed President Mary Daly gave Reuters her take on the situation, and it's basically: inflation might stick around longer than your altcoin portfolio, nobody's favorite.

Daly said March inflation figures wouldn't shock anyone (because at this point, we're all numb), and that the US had an inflation problem before oil decided to throw a tantrum worthy of a Discord mod. Now, with oil shocks in the mix, taming inflation back to the Fed's beloved 2% target is going to take more time than originally planned—think ETH 2017 bull run timelines but more painful.

"We could be in a wait-and-see position on rates," Daly noted, which is Fed speak for "we have absolutely no idea what we're doing." But here's the hopeful part: if the Iran situation calms down quickly and oil prices chill out, rate cuts aren't completely off the table—like that one coin you keep on your watchlist but never buy.

Daly put the probability of a rate hike lower than the probability of a cut or hold, which should make rate hawks sad (not that they have feelings), and outlined two paths forward:

Scenario One: War resolves fast, ceasefire holds, oil prices drop, and consumers see relief at the pump. This keeps the previous inflation trajectory on track and rate cuts stay on the menu—basically the mooning scenario for TradFi, and we'd all finally get that Lambo we've been farming NFTs for.

Scenario Two: Oil supply disruptions drag on even after the shooting stops. Inflation stays elevated longer than the Fed expects, and the Fed just... waits until things are crystal clear—because nothing screams financial leadership like paralysis through analysis.

*This is not investment advice.