Hostilities escalate between Israel and Lebanon
September 23, 2024
Israel launched new air attacks on hundreds of sites in Lebanon. A Hezbollah official said it had entered a new stage of open warfare against Israel. Benjamin Netanyahu said Israel would take “whatever action is necessary” to diminish the threat from Hezbollah. This renewed aggression has the world worried that the conflict will spill over into a bigger event in the Middle East.
As has been the case for some time now, the energy market’s reaction to this renewed conflict is very muted. I guess the markets need an actual disruption to production or supplies before they react.
Baker Hughes reported that oil rigs remained unchanged last week, at a total of 488 rigs in operation.
Federal Reserve Governor Christopher Waller said estimates of weak upcoming inflation readings cemented the case for a half-percentage-point rate cut at the Federal Reserve’s meeting last week, noting there was “a lot of room” for the Fed to reduce rates in coming months. He said data that came in during the days ahead of the Fed’s meeting showed the Personal Consumption Expenditures price index in recent months may have fallen below the Fed’s 2% target. Lower than he expected, and that “pushed me in the direction” toward the larger reduction.
Traders on Friday added to bets favoring a second 50 basis point interest rate cut by the Federal Reserve after Fed Governor Christopher Waller said he was worried that inflation may soon be running substantially below the US Central Bank 2% target.
Fox Weather reports that “Millions of people living on the Gulf Coast from Florida to Louisiana are being urged to make sure preparations are in place as Invest 97L continues to become better organized and will likely become Tropical Storm or Hurricane Helene in the coming days as the system enters the Gulf of Mexico.” The gulf was just getting back to normal, but now some oil companies are shutting down platforms again.