DiabloWags said:
The breakout in oil is just beginning.
Brent closed the week at $92.69
JP Morgan says it could go to $120 - $130 if the War is prolonged.
As a result, the Fed would not be lowering interest rates any time soon.
Economic growth will suffer.
So will American's wallets.
Pray this isn't 1973.
If oil prices rise, economic growth will slow (oil sector not big enough to compensate for other parts of the economy suffering), and so will inflation due to rising input and operating costs. The former would motivate the Fed to lower rates, while the latter would push the Fed to lower rates. So you're saying that the impetus to throttle inflation through higher rates always prevail over the pressure to lower rates in a recession?
I guess history does support this, see the interest rates during the stagflation of the 70s.





