That HAND that Beat Bessent's HOUSE

Shin interprets oil’s breakout from an ascending-triangle pattern, led by Shanghai as Chinese demand returns, as evidence of a fundamental supply shortage rather than merely a headline-driven shock. Divergent prices across exchanges and uncertainty around flows through the Strait of Hormuz add to the risk of a scarcity-driven buying panic, although he does not estimate a specific price target.

Shin argues that higher diesel prices could feed into CPI because diesel powers trucking, agricultural machinery, water pumps, and other equipment used to produce and distribute goods. He links the recent diesel surge primarily to the Iran attack and says the resulting oil shock creates a supply-side risk that monetary authorities cannot directly control.

Shin says Treasury yields are rising across maturities and describes oil prices and 10-year yields as moving in a nearly one-to-one relationship, with higher oil prices potentially increasing dollar demand and prompting foreign Treasury selling. He also points to the 20-year auction’s record-low foreign institutional demand as requiring higher yields to attract buyers.

Shin warns that higher rates could increase U.S. debt-servicing costs, potentially forcing additional borrowing and creating a debt-service feedback loop. In his view, the market controls the long end of the curve, leaving policymakers to balance the risk that dovish guidance worsens bonds against the risk that hawkish guidance damages equities.