Threat to Iran Oil fuels Oil prices [Video]
|Global headlines were shaken yesterday by the news that Israel is considering striking Iran’s oil facilities, and that Joe Biden may let Israel do it. Oil surged.
Even though the rising oil prices should not last long (hopefully), they may have an impact on the short and medium-run inflation outlook. That, combined with strikes in US East and Gulf coasts are inflationary. The spike in energy prices and supply chain disruptions were the main responsible for the soaring global inflation after the 2020s. Of course, today’s situation is not comparable to the pandemic period, but could – maybe - get the Federal Reserve (Fed) members question their overly optimistic view on inflation, and their overly dovish stance on rates. The expectation of another jumbo rate cut is melting by the day. And the selloff in Japanese yen and the British sterling add to the positive pressure in the US dollar.
Today’s US official labour data will be very important in providing a final conclusion to the week’s so far stronger-than-expected jobs figures.
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