Oil is spiking as fighting spreads around the Red Sea, and that is bad news for drivers, borrowers, and stock investors alike.

• Brent crude has jumped past $108 and Goldman Sachs now points to $120 as the next stop.
• Houthi forces are pushing toward Bab el-Mandeb, the narrow choke point that Saudi Arabia started using after Iran blocked the Strait of Hormuz.
• If that passage closes too, the oil still reaching world markets from the Red Sea could slow to almost nothing.
• Bonds are selling off hard, pushing borrowing costs up for the government, cities, and ordinary people — and the Fed may raise rates next week.
• Trump's approval on the economy has collapsed with independents, and Iran is building ballistic missiles again, so neither side looks close to stopping.

Outlook: With more US military advisers arriving in Saudi Arabia and no sign of a ceasefire, oil and borrowing costs are likely to keep climbing and feed into the price of everything else.