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RSM Chief Economist Joseph Brusueras: Warsh delivered the right hawkish signals at the press conference and attempted to reinforce the Fed’s credibility in restoring price stability, while also enhancing his own credibility.U.S. stocks continued to decline after the Walsh press conference, with the S&P 500 falling 1%, its biggest drop since July 29, the Dow Jones Industrial Average down 1.65%, and the Nasdaq Composite down 0.6%.On September 17th, Federal Reserve Chairman Warsh declined to answer questions at a press conference regarding his interactions with US President Trump. Trump has been calling for lower interest rates in recent months. Warsh stated, "I have no comment on my discussions with the president." White House Council of Economic Advisers Chairman Christopher Phelan said on Tuesday that raising interest rates would be a "mistake."On September 17th, Federal Reserve Chairman Warsh stated that he would not disclose details of future interest rate decisions by the Federal Open Market Committee (FOMC). He said, "I am not responsible for providing forward guidance. Our decision today (to raise interest rates) is a carefully considered, serious, and responsible one. We have been preparing for and thinking about this decision for the past 110 or 120 days." Warsh also stated that this decision was not market-driven. He said, "Our decision today is based on our assessment of the current situation, our judgment of the employment trend, and our assessment of the strength of the economy. Sometimes, the market tries to anticipate our decisions. I watch market prices to see what information the market is sending. But todays decision is our own."On September 17th, Warsh stated that while the Federal Reserve cannot prevent price shocks in commodities such as oil on its own, the central bank can use policy tools to prevent further spread of inflationary pressures. Warsh said, "We cannot influence the price of any single commodity, such as oil or groceries." However, he pointed out, "We can and will ensure that any changes in relative prices do not spread further, and do not have second- or third-order effects on the economy. Thats our responsibility, and thats what were doing." Warsh made these remarks as U.S. diesel prices hit a record high due to the Iran war.

On concerns of demand destruction, oil prices plummet, with benchmarks down 4% for the week

Haiden Holmes

Sep 09, 2022 10:39

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Oil prices dropped in early trade on Friday, following a slight recovery in the previous session, leaving them on track to fall for a second consecutive week on concerns that aggressive rate hikes by central banks and COVID-19 limitations by China may have an impact on demand.


Brent crude futures slipped 12 cents, or 0.1%, to $89.03 per barrel at 00:51 GMT on Friday, after rising 1.3% on Thursday.


Futures for U.S. West Texas Intermediate (WTI) crude fell 19 cents, or 0.2%, to $83.35 a barrel after a 2% increase in the previous session.


The market reached its lowest position since January at one point during the week, with both indexes down nearly 4%.


The decline has occurred despite a modest output cut by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, Russia's threat to cut oil flows to any country that supports a price cap on its crude, and a weaker outlook for the growth of U.S. oil production.


The U.S. Energy Information Administration forecast on Thursday that U.S. crude output will increase by 540,000 barrels per day to 11.79 million barrels per day in 2022, a reduction from a previous estimate of 610,000 bpd.


Amid the week, the 50-day moving average went below the 200-day moving average in what is known as a 'death cross,' leading analysts to assume that the sell-off may have been overblown, as demand in China, the world's largest oil importer, may recover swiftly.


"China's demand is harder to predict, but historically, a post-COVID reopening has been accompanied by a recovery rather than a gradual increase. The fundamentals appear to be at odds with the most recent technical indications in this context "National Australia Bank (OTC:NABZY) stock is cheap, according to a letter from analysts.


China is expanding its limitations today. On Thursday, the majority of Chengdu's more than 21 million residents were cautioned not to travel over upcoming holidays, while millions more were given the same advice in other regions of China.

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