Daily crude oil price movements are a weathervane of investor sentiment about the potential for an economic recession this year. The Federal Reserve Board continues to fight US inflationary pressures by boosting short-term interest rates to slow the economy. They hope higher rates, which cascade throughout the economy, will lift the cost of capital, operational expenses, financing costs, and reduce consumer demand. Less consumption means businesses can slow operations and higher fewer workers, which will reduce labor costs that push up the cost of consumer goods.
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