An oil spike in a weakening economy is not inflationary – it is contractionary! FED needs to LOWER rates to counter the effects of higher Oil Prices. “The Income Effect” is the reason. Morgan Stanley still expects Fed cuts, oil shock threatens growth. $150 oil warning, recession risk climbs to 20%
Let me be very clear! An oil spike in a weakening economy is not inflationary – it is contractionary! The FED is extremely misguided if they are going to treat a Supply-Driven Oil-spike as an inflationary trigger. FED needs to …