Commodity traders can have as hard a time as any of us trying to predict oil prices. But it’s interesting to see what the current price structure tells us about what traders believe brought about the current high prices and what may be in store for us next.
Author Archives: econbrowser
Predicting the Fed’s next move
Fed-watching can be something of an arcane sport. Will the subtle disappointments in the May employment and automobile sales figures persuade the Fed to hold back on another interest rate hike? And what would someone who’s really “in the know” infer from how high Alan Greenspan raised his right eyebrow at his last public appearance? Although playing that game can be fun, it’s actually quite easy for anybody to have a very well-informed belief about what we can expect next from the Federal Reserve.
Economic consequences of the high price of oil
All but one of the U.S. recessions since World War II have been preceded by a dramatic increase
in crude petroleum prices. Recent turbulence in energy markets has some analysts speculating that,
in the immortal words of Yogi Berra, it could be deja vu all over again. But this oil price shock
differs significantly from earlier episodes, leading me to believe that the economy will be able to
adapt to the new pricing environment without a major economic slowdown.
Disappointing job statistics?
The May employment figures
released by the Bureau of Labor Statistics yesterday sent mixed signals, revealing that U.S. job
creation slowed in May even as the unemployment rate edged slightly lower.
What’s up with oil prices?
Oil prices made the third sustained run above $50 that we have seen over the last 9 months. Although the week-to-week price changes have been quite volatile, it appears that long-run factors, particularly strong oil demand from China and other developing counries, is the major story here.
No sign yet of recession
The probability that the U.S. economy is experiencing a new economic recession remains below 5%, according to the latest value of the quarterly real-time GDP-based recession probability index.