New Delhi, June 26 -- One of the many reasons that US President Donald Trump announced a sudden ceasefire between Israel and Iran, taking the world and visibly also the two warring sides by surprise, was probably the worry of where wider warfare would send crude oil prices. A closure of the Strait of Hormuz or oil rigs being set ablaze could have stoked inflationary pressures in an economy already under the foreshadow of inflation, thanks to tariffs. Cost-of-living risks have forced the US Fed to keep the cost of money higher than it may otherwise have been.

This is the second time that Trump's approach to world affairs seems to have shown sensitivity to markets. In April, his tariff hold-off followed bond market shudders as participants...