There's a subtext here that's important for oil

The economy according to Yellen:

  • I see no signs the economy is in a downturn
  • Consumer spending remains robust
  • Biden wants to make gasoline prices affordable
  • I think we're achieving lower inflation
  • There's absolutely no reason for a government shutdown
  • Labor market cooling but without significant layoffs

I think she's mostly on track with her assessment. The problem for the market is that if the economy continues to hum along and oil prices stay hot, we should be talking about more Fed hikes in 2024 rather than cuts. Right now the market is pricing in 77 bps of cuts next year (though that's down from 86 bps last week).