Fed Chair Hints at May Interest Rate Hike
March 22, 2022
Federal Reserve Chair Jerome Powell said on Monday that inflation is too high and that there was an obvious need to return momentary policy to a more neutral level. Powell hinted at a .5% rate hike at the Fed’s next meeting in May. Raising interest rates is normally bullish for the US dollar which in turn is bearish commodities in general and especially crude oil which is the price in dollars.
The market traded higher yesterday on the news that the European Union was considering a ban on Russian Energy. The EU’s Foreign Ministers disagreed on whether and how to impose sanctions on Russia’s energy sector over its invasion of Ukraine, with Germany saying the bloc was too dependent on Russian oil to decide an embargo. The EU Foreign Policy Chief, Josep Borrell, said that while the bloc would “continue to isolate Russia” concrete decisions would be made later.
President Joe Biden said there is evolving intelligence that the Russian government is exploring options for potential cyberattacks against the USA. He urges the private sector to harden its cyber defenses immediately.
OPEC+ compliance on their oil output cut agreement rose to 136% in February with oil producers falling short of target goals by over 1 million BPD.
Bank of America Global Research said in a market that is dangerously short on barrels, it sees the risk of a melt-up in WTI as contracts move toward expiry during the first half of 2022.