Oil at mid-$90s ahead of Fed inflation verdict, other rate decisions
Investing.com — Oil bulls pressed ahead Monday with the momentum they had gained in the past three weeks, closing in on the Saudi wish for triple-digit pricing, as markets awaited the Federal Reserve’s verdict on U.S. inflation creeping again from high energy costs.
The Fed’s policy-makers aren’t expected to raise interest rates when they meet on Sept. 20, after 11 hikes that added 5.25 percentage points to a base rate of just 0.25% in February 2022.
But what Chairman Jerome Powell says at his news conference on Wednesday will be closely watched for clues on Fed think for the rest of the year, especially with two more policy meetings on the schedule for November and December.
For context, the headline reading for the U.S. Consumer Price Index rose for the second month in a row in August, reaching a year-on-year growth of 3.7% from 3.2% in July.
That was largely due to high pump prices of gasoline which accounted for more than half of the increase — a phenomenon that could put renewed pressure on inflation fighters at the Fed. The central bank’s desired inflation remains at a max 2% per year and it has vowed to get there with more rate hikes if necessary.
Beyond the Fed, markets are also awaiting rate decisions from the Bank of England, the People’s Bank of China and the Bank of Japan this week.
The BOE is expected to hike interest rates by 25 basis points, while the PBOC and the BOJ are expected to keep rates on hold. But any signals on future policy, particularly from the BOJ, will be in focus, given that several members of the Japanese central bank flagged a potential end to its negative rate regime.
In China, the PBOC is expected to keep its loan prime rates on hold as it struggles to strike a balance between
Read more on investing.com
