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Fed might make symbolic Emergency Rate HIKE
- Thread starter The Kin
- Start date
I don't think a fed rate hike would should slightly increase us demand of oil, as consumers tend to buy more of what is cheaper.
Quote from The Kin:
No need to be smart. I'm under the impression that a rate hike would strengthen the dollar which will decrease the price of crude, which is priced in dollars. In theory it should also decrease US demand slightly albeit the US isn't the only major player anymore.
If the FED reaised rates to be in line with inflation (around 4%), it would go a long way towards blowing the top off of the commodity bull. It would also strengthen the dollar, kill inflation, and probably boost the savings rate. On the other hand, GDP growth would slow, housing crisis would continue, and wall street bonuses would suffer. Sometimes, making the right decision is the one that hurts the most; therefore, we can be sure that the FED will continue lowering rates!
The fed has little to do with the price of oil at this point. If they raised rates any pullback in crude would be temporary.
Quote from The Kin:
No need to be smart. I'm under the impression that a rate hike would strengthen the dollar which will decrease the price of crude, which is priced in dollars. In theory it should also decrease US demand slightly albeit the US isn't the only major player anymore.
Who wants a strong US$ anyway ???
Not the Fed.