Local Fed: Financial Markets Predict $0/Barrel For Oil By Mid-2019
St. Louis Fed economists say oil would have to hit $0/barrel (yes, you read that right) by 2019 in order to achieve the super low inflation rates predicted by the market.
St. Louis Fed president James Bullard thinks the Fed should listen to the markets and veer from its rate normalization path. He says, “I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations.”
The national Fed thinks the forces holding down inflation are just temporary, despite what financial markets say, Bloomberg reports. Employment, wage growth and the Consumer Price Index all paint a different picture, showing strong economic numbers.
With the markets pricing ridiculous lows for future oil prices, it might be a good call to take them with a grain of salt—especially when futures contracts put oil at $50/barrel in the same time frame. [Bloomberg]
