Market Underestimates Ukrainian Hits on Russian Fuel Exports
Feels to me like the effects of Ukrainian attacks on Russian oil and diesel export capacity is underappreciated by the market.
Fed Reacts Differently to Oil Price Shocks
I used Claude to draw a chart that captures how I see the Fed's asymmetric reaction function towards oil. https://t.co/q9WcR7aCNC
Fed Will Prioritize Inflation Amid Oil Shock, Unless Markets Worsen
I mostly agree w/@biancoresearch here. Covid, tariffs and Iran all had elements of supply shock. Covid's came with a demand shock too so inflation dominated Fed response. Tariffs were 2-sided; Fed first prioritized inflation, then growth. w/oil, will prob prioritize...
US Gas Prices Shifted to Brent‑Only Influence After 2010
"U.S. retail gasoline prices respond to Brent and WTI before January 2010 and then only to Brent afterwards." (Note: this study is from 2019)
Markets Expect Fed Rate Hike Over Cut This Year
1/ Markets now think the Fed is more likely to raise rates than cut them this year. A rate hike is not my baseline scenario, but I see the risks rising, for the following reasons. (Link to column in next...
Trump Lifts Ban, Allows US Trade of Iranian Oil
"Trump just authorized Americans to trade Iranian oil for the first time since Clinton banned Americans from doing so in 1995." @petereharrell
Today's $4 Gas Still 33% Cheaper than 2008
If gasoline hits $4 now, that's still a third less than the $6 it hit in 2008 in today's dollars ($4 in nominal dollars then).
Oil Must Hit $138 for Recession Odds over 50%
How high does oil have to get for recession probability to top 50%? $138. That's the average answer in our latest survey of economists, who generally see an increase in inflation but little impact on growth from the Iran war....
AI Will Boost, Not Replace, Software Developers
My boring take, as a so-far failed vibe coder: AI is more likely to keep lots of software developers employed making way more , and better, software than ever, than to put them out of work because we consume...
Bond Yields Rise on Moderate Oil Shock, Easing Doubtful
How to interpret the rise in bond yields across the G10? Here's a guess: the market has priced in moderate oil disruption that marginally raises upside inflation risks and lowers probability of central bank easing this year. If at some...
Inflation Unmoored in Late
This is the popular narrative but it's not correct. Inflation de-anchored in the late 1960s under pressure from Great Society & Vietnam spending and Martin acquiescing to LBJ's pressure. Inflation was kept artificially low in the early 1970s by wage...
Do AI Assistants Respond Better to Polite Requests?
When you ask AI (ChatGPT, Claude, Gemini, etc.) to execute a task, do you say "please"?
NJ Tax Credit Favours Healthy Seniors Over Younger Generations
This NJ property tax credit for almost all seniors is the sort of upside down priority I was thinking of in my column. It notes the elderly are physically and financially healthier than ever, yet their needs keep taking priority...
We Tackle Iran, Oil, and War Questions
My colleague @DavidUberti and I answered reader questions about Iran, oil and war (or, we at least tried to ...) https://t.co/eKZls2GgE1
Risk‑off Defies Norms as Yields Stay Flat‑up
Puzzling. In risk-off market yields go down, but they're flat to up, globally (so not "sell-America"). Central banks seen as less likely to ease. True, until you get non-linearities and recessions (e.g. summer of 2008, oil up sharply and ECB...
Gulf War III Cuts Global Oil Supply by 20%
Yeeps: @Bob_McNally of @RapidanEnergy "Gulf War III has disrupted ~20% of global oil supply for nine days and counting – more than double the previous record set during the Suez Crisis of 1956-57, which disrupted just under 10%."
Lag And
Hey energy experts, what's the lag, in days, from a change in wholesale gasoline futures to retail (AAA average) prices? And what's a good rule of thumb on the spread/mutiple between the two? (Answer in DM's if you prefer.)
Trump’s Energy Price Claims Contradicted by Rising Costs
Energy Sec Wright: “Trump administration has been all in on lowering energy prices, and I would say quite successfully”. In fact, electricity and utility gas prices rose notably in Trump's first year, by more than in Biden's last. Gasoline now...
U.S. Energy Shift Buffers Oil Shock From Recession
Why the oil shock won't cause stagflation or recession: #1 U.S. less energy intensive than in past price spikes. Gasoline consumption lower today in in 2007. #2. U.S. net petroleum exporter. Therefore mildly positive for terms of trade. (link to...
Weighted Avg 2.3% Signals Bullish Breakout Over CBO
The probability weighted average of both @jasonfurman and the survey average is 2.3%*, i.e. solid breakout. That's bullish; CBO is at 1.8%. *(Assumes 5% for the >4% phase transition scenario. I figure probabilities of higher figures quickly fall to...
IEEPA Threat Raises Tariff Ceiling, Shifts Negotiation Dynamics
While 15% is close to what many countries ended up negotiating with Trump, he invoked IEEPA to threaten much higher rates, providing powerful leverage. If 15% is an effective ceiling (outside 301/232 actions), that changes the bargaining dynamic.
Fed Rarely Cuts Rates During >8% Nominal Growth
"The Federal Reserve has cut rates only a handful of times when nominal growth was greater than 8 per cent and most of those instances were in the 1970s." Richard Bernstein @RBAdvisors in the FT https://t.co/vzNnkKmGpY
Inflation Still Stubborn: CPI 2.8%, Core 3.2%
FWIW, since the first "clean" CPI in November (post shutdown), headline CPI inflation is 2.8% annualized and core is 3.2% annualized. Neither suggests much stepdown yet in underlying inflation.