Ep. 117A – Oil Shock Over? + All Eyes on the Fed

The Kapital News
The Kapital News
Ep. 117A - Oil Shock Over? + All Eyes on the Fed

While the oil markets continued their ascent in today’s trading session on the back of the attacks in Saudi Arabia – we now have to ask, is the shock over? While many nations are pointing the finger at Iran, despite the fact that the Yemeni Houthi’s have claimed responsibility, President Trump appears to be pulling back from the hostile language. In a tweet yesterday, the President said the US was “locked and loaded” waiting on confirmation that it was Iran. Today, President Trump claims that this is not a big deal and that there are plenty of avenues to make up for the loss in oil. The President needs to be commended for not escalating this further – at least in rhetoric. This is oil and metal that was affected at the processing facility – not American lives. So, will prices stabilize or will this escalate further? It’s anybody’s guess, but let’s pray for de-escalation and peace. Starting tomorrow, the Federal Reserve will begin their two-day FOMC meeting where they are likely going to conclude that further interest rate cuts are warranted. With this recent oil geopolitical risk, the Fed now has cover to go in other direction – to cut or not to cut? Higher oil may translate into higher inflation – don’t cut and perhaps exude their independence because the President and Wall Street want cuts. Or, cut by 25-50bps because this is a geopolitical risk that may escalate and would cause a deepening of the current global economic slowdown – thus cuts are warranted to fend off the downward pressures. This too is anyone’s guess, but the Fed is going to do what the Fed wants to do either way. We still anticipate a cut of 25 basis points. For certain, all eyes will be on the Fed. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #Recession #Oil #Politics #Invest #Peace #WakeUpAmerica

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