I recently read an article about OPEC, and how oil prices will likely rise for the next year or two. The article said this will cause a significant uptick in inflation indicators, so the Fed will likely raise rates.

I can understand raising rates in response to monetary inflation, but it doesn’t make much sense to me to raise rates in response to supply-side shocks. It also seems cruel since the goal seems to be to raise rates so more people become unemployed or underemployed so that can’t afford to buy gas.

  • mattreb
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    1 year ago

    Normally what you said would be true, but our economy is currently very dependent on oil, so slowing it down also decreases the demand of oil, or at least this is my understanding… Of course with things like unemployment is a matter of balance I guess