Houthi Attack Sends Brent Crude Soaring to Two-Month High

Military tensions in the Middle East have sent shockwaves through global markets after an attack by Yemen's Iran-aligned Houthi rebels on two Saudi Arabian oil tankers in the Red Sea. Brent crude prices surged to $100.69 a barrel for the first time since May, sparking concerns over inflation and interest rates.

The attack has heightened fears of a prolonged period of Middle East tensions, which could deal a severe blow to the global economy. According to World Bank Chief Economist Indermit Gill, 'the worst-case scenario' of such tensions lasting more than six months already appears to be materializing, with global economic growth potentially plummeting to 1.3%.

Rising oil prices have also triggered a sharp surge in bond yields, making it less likely for the U.S. Federal Reserve to cut interest rates. Analysts warn that this could lead to higher inflation and reduced consumer spending power. The recent attack has added significant uncertainty ahead of the Fed's decision on July 29.