Commodity & Infrastructure Insights

Energy Investors Unfazed By US Selling Oil

The Administration’s planned release of 1 million barrels of oil a day from the Strategic Petroleum Reserve (SPR) is borne of their frustration with high prices. Average crude prices have been higher under Biden than Trump, even after adjusting for the collapse during Covid (not Trump’s fault) and the jump following Russia’s invasion (not Biden’s fault).

Let’s Talk About Gold

Gold will always have a seat at that table, not because it is a commodity, but because it has an indefinable characteristic that has made humans value it for millennia – and hopefully for millennia more to come.

Markets Lose Faith In 2% Inflation

In mid-January in Why You Shouldn’t Expect A Return To 2% Inflation we explained some of the persistent upward pressures on inflation. Since then ten year inflation expectations derived from the treasury bond market have increased by 0.5%. Russia’s invasion of Ukraine is a big factor, but nonetheless a half point increase over the next decade is a substantial move. Preserving purchasing power is the point of saving, and inflation entrenched at a higher level investors presents new challenges to investors.

Interest Rates Are Interesting Again

It must have been a lively FOMC meeting last week. The Fed has obviously committed their biggest mistake in living memory, and they finally started to normalize short term rates. They’re a year late, to the evident frustration of James Bullard who dissented on the 0.25% increase because he preferred 0.50%.

The Future of Platinum-Group Elements after Russia’s War in Ukraine

It is common knowledge that Russia is a major exporter of oil and natural gas. Just the fear of disruption of Russian energy exports has sent oil and natural gas markets into a tizzy. Russia, however, is not just a Slavic Saudi Arabia.

How Far Will The Fed Go?

Next week the Fed Funds rate is expected to be raised, for the first time in over three years. Pundits love to say the Federal Reserve is “in a corner”, implying a Hobson’s Choice between possible courses of action. This hackneyed term is being deployed again, mischaracterizing their choices.

Russia Boosts Inflation

Had Jay Powell and the FOMC prudently begun reducing the economy’s degree of monetary support a year ago when the Covid vaccine was already being administered, they’d have more flexibility to manage the economy’s current challenges. From a 2% neutral rate and with the balance sheet shrinking, they’d be able to pivot towards easing or further tightening depending on circumstances. Because of that policy error they’re now having to get back to neutral during high economic uncertainty.

Russia Boosts Inflation

Had Jay Powell and the FOMC prudently begun reducing the economy’s degree of monetary support a year ago when the Covid vaccine was already being administered, they’d have more flexibility to manage the economy’s current challenges. From a 2% neutral rate and with the balance sheet shrinking, they’d be able to pivot towards easing or further tightening depending on circumstances. Because of that policy error they’re now having to get back to neutral during high economic uncertainty.

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