Oil Hits $133; Fed Signals Rate Cut Pause

The two are linked because the Fed’s loose monetary policy has helped make the dollar so weak that it takes 133 of them to buy a barrel of oil. Global demand hasn’t helped, either. Despite acknowledging a slowing economy by cutting their growth forecast, the Fed also signaled they’re going to stop cutting the Federal Funds rate. That’s good news, but not enough to keep the specter of inflation at bay. At some point pretty soon, they’re going to have to start tightening.

Watch those inflation and unemployment numbers rise, while growth drops. It’s called stagflation. And it’s going to be ugly.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: