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Federal Reserve Chairman Warsh will hold a monetary policy press conference in ten minutes.On July 30th, Federal Reserve officials kept interest rates unchanged, but the vote was divided, showing that some policymakers are increasingly convinced that a rate hike is needed to curb rising inflation. Logan, Hammark, and Kashkari all voted against a 25-basis-point increase. This marks the fifth consecutive time officials have chosen to keep rates unchanged. The rest of the committees post-meeting statement was entirely consistent with the statement released after the June meeting. Officials reiterated their commitment to "achieving price stability." However, the dissenting votes suggest that for Fed Chair Warsh, who just took office in May, continuing to hold rates steady will face greater challenges if inflation concerns intensify. Trump has repeatedly called for rate cuts, including this Monday. Warsh, nominated by Trump to be Fed Chair earlier this year, stated that he would ensure policy decisions are not influenced by politics.On July 30th, in this interest rate decision, three of the five regional Federal Reserve presidents voting on the Federal Open Market Committee (FOMC) voted against it: Cleveland Fed President Hammark, Minneapolis Fed President Kashkari, and Dallas Fed President Logan. All three unanimously advocated for a 25 basis point rate hike. This is the first time since September 2016 that the Fed has seen three unanimous dissenting votes in a single policy decision, reflecting a growing voice within the Fed supporting a tightening policy. Fed Chairman Warsh, who supports maintaining the current interest rate, has consistently emphasized the Feds responsibility to curb inflation. He is expected to be asked at the press conference at 2:30 AM Beijing time why he believes continuing to be patient remains the most appropriate policy option.Market expectations indicate that the market is no longer fully pricing in a September rate hike by the Federal Reserve.Nick Timuraos, the Feds mouthpiece: The FOMC decided to keep interest rates unchanged with a 9-3 vote. Three regional Fed presidents voted against a 25-basis-point rate hike. This is the first time since 2016 that the Fed has received three unanimous dissenting votes in a single policy decision.

Oil declines more as recession fears deepen

Haiden Holmes

Jun 23, 2022 11:28


Oil prices fell 2% in early trade on Thursday, extending losses from the previous session, as investors were concerned that aggressive U.S. interest rate hikes may trigger a recession and cut gasoline use.


U.S. West Texas Intermediate (WTI) oil futures declined $2.39, or 2.3%, to $103.80 a barrel at 00:00 GMT. Brent oil prices sank $2.24, or 2.0 percent , to $109.50 a barrel.


On Wednesday, both indexes dropped about 3 percent, reaching their lowest levels since mid-May.


Investors continue to assess the degree to which they should be concerned about the likelihood of a global economic recession as central banks attempt to manage inflation through interest rate rises.


"Oil markets remained under pressure as investors concerned that rising U.S. interest rates will hinder the economic recovery and reduce gasoline demand," said Kazuhiko Saito, head analyst at Fujitomi Securities Co Ltd.


"U.S. and European hedge funds have begun selling their positions ahead of the end of the second quarter, further lowering market sentiment," he continued, predicting that the WTI might go below $100 per barrel before the July 4 holiday in the United States.


Jerome Powell, the chairman of the Federal Reserve, emphasized on Wednesday that the Fed is not aiming to engineer a recession in order to battle inflation, but is fully dedicated to bringing prices under control, even if doing so risks a recession.


In the meanwhile, U.S. President Joe Biden urged Congress to suspend the federal gasoline tax for three months to combat record pump prices and provide American customers with temporary relief this summer.


Sato of Fujitomi stated, "Even if the gasoline tax was suspended, retail prices would remain high, making it hard to increase demand."


The U.S. Energy Information Administration has delayed the release of its weekly oil figures until at least the next week due to system issues. Originally, the figures were scheduled to be disclosed on Thursday.


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