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The Fed Is Driving Down Oil Prices
Posted by BFP Staff on Jun 21, 2018 at 10:20 AM
Some governments are desperate to shield their economies from higher prices.
By Nick Cunningham of Oilprice.com
The U.S. dollar has jumped to its strongest level in nearly a year, raising questions about how a strong greenback could act as a drag on debt and oil demand in much of the world.
The U.S. Federal Reserve announced another rate hike a few days ago, which helped edge up the dollar to a new high for the year.
The greenback has “a little room to run,” Kathy Jones, a New York-based chief fixed-income strategist at Charles Schwab, said in a Bloomberg interview. “We have seen softer numbers out of Europe and firmer numbers out of the U.S.” The U.S. Federal Reserve is unwinding its extraordinary monetary intervention after a decade of near-zero interest rates. The Fed has announced quarter-point interest rate hikes twice and is planning on at least two additional increases this year.
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