Venezuela's oil industry is in disrepair; cannot ramp up production quickly. In short term, China loses Venezuelan oil and must bid on open market, pushing prices higher.

Producers think longer-term; worried about Trump administration's multi-front push for more production (US, Venezuela, Saudis).

Two factors lowered oil last year: Trump election pushing production and perception of weak economy. Now deals are done, economy ended strong, demand up. Without Venezuela news, crude would drift higher first half of year; still thinks that will happen.

US 10-year was the only developed market yield that fell in 2025—an outlier. Reason: political manipulation (Trump calling it benchmark, manipulating supply, demanding Fed cuts).

The 10-year stopped falling in September. The story can't continue; outlier will reverse and yield will be a bit higher.

Trump can and will pick someone committed to 1% funds rate, but FOMC committee is asserting independence; may not have 6 other votes.