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February 19th - Federal Reserve officials reiterated their concerns about inflation, with several policymakers suggesting that the central bank may need to raise interest rates if inflation persists above target. The minutes of the Feds January meeting revealed that "several participants indicated they would have supported a two-way description of the Committees future interest rate decisions, reflecting that raising the target range for the federal funds rate might be appropriate if inflation remains above target." The minutes also showed that "the vast majority of participants judged that downside risks to employment had eased in recent months, but risks to persistent inflation remained." According to the latest minutes, one group of policymakers believed that further rate cuts were unlikely, at least in the near term. The minutes stated: "Several participants cautioned that further easing of policy against the backdrop of high inflation readings could be misinterpreted as a weakening of policymakers commitment to the 2% inflation target."February 19th - The minutes of the Federal Reserve meeting revealed that several participants believed further interest rate cuts were more likely if inflation fell as they expected, but most indicated that inflation was likely to progress more slowly than generally anticipated. At its January meeting, the FOMC voted 10-2 to maintain the benchmark federal funds rate in the 3.5%-3.75% range. Waller and Milan voted against a 25 basis point cut. The committee removed wording regarding increased downside risks to employment from the previous three statements. Data released since the Feds January meeting shows accelerating economic growth, slowing inflation, and a stabilizing labor market. According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose slightly in January, influenced by lower energy costs. The core CPI (excluding food and energy) rose in line with expectations.Federal Reserve meeting minutes: Federal Reserve staff have a stronger outlook on economic activity than in December, expecting inflation to be slightly higher than previously anticipated and the unemployment rate to gradually decline starting in 2026.Federal Reserve meeting minutes: A minority of participants favored a rate cut in January.Federal Reserve meeting minutes: Several participants believed that further rate cuts could undermine market perception of the commitment to the inflation target.

WTI bulls move in on supply side concerns, but the Fed looms

Alina Haynes

Dec 13, 2022 14:28

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On Monday, the price of West Texas Intermediate, or WTI, crude oil increased as supply-side concerns outweighed fears of weakening demand. At the time of writing, WTI is trading at $73.40, a 0.1% increase from its low of $73.27. It has risen from a low of $73.27 to a high of $73.51.

 

Despite the upcoming US consumer Price index and Federal Reserve meeting, supply concerns have trumped recession concerns in the most recent sessions. The Fed is likely to raise interest rates by 50 basis points on Wednesday, following the release of today's inflation data from other U.S. states, which might bolster the Fed's reputation.

 

"Core prices likely increased by 0.3% month-over-month in November, for the second consecutive month. We anticipate that goods deflation will once again serve as a counterbalance to shelter inflation. Importantly, the November decline in gas prices is anticipated to bring respite to the CPI. Overall, our m/m predictions imply a 7.3%/6.1% YoY increase in total/core pricing," TD Securities analysts stated.

 

The money markets presently assign a probability of about 75% that the US central bank would raise rates by 50 basis points following four consecutive rate hikes of 75 basis points. However, other observers believe that the event will have a hawkish consequence.

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