The anticipation concerning the US Fed interest rate cut has already started to show its potential results.
The price of oil fell on Friday in the wake of a possible delay in the Federal Reserve’s interest rate cuts.
Per a Reuters report, the Federal Reserve’s governor, Christopher Waller, suggested that the reserve should potentially delay the reporting of interest rate cuts by a couple of months.
Waller backed his opinion by adding how this potential delay can help the Treasury determine the economy’s existing stance.
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Are Federal Reserve Interest Cuts To Be Delayed?
The prices of oil are marking a descent in their prices after a federal reserve’s governor’s recent remarks.
Christopher Waller, the governor of the US Federal Reserve, suggested that the agency delay its interest-cut issuance for at least two to three months.
“That, along with a 3.3% annualized increase in fourth-quarter GDP and the more than 350,000 jobs added to the U.S. economy in January. This has reinforced my view that we need to verify that the progress on inflation we saw in the last half of 2023 will continue. This means there is no rush to begin cutting interest rates to normalize monetary policy,” Waller later shared.
Waller’s comments suggest that the Federal Reserve would like to observe the current economic stance. In addition to this, the reserve would also like to note whether the recent market sways are temporary or whether standardization is needed to rectify its monetary policy.
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Current Oil Price
In response to Waller’s comments, the price of oil took a slight dip.
Brent crude futures were down 0.5%, stabilizing at $83.39 per barrel. At the same time, US-West Texas Intermediate futures were down 0.5% at $78.21.
However, the demand for oil shows no signs of distress. As per the statistics shared by JPMorgan, indicators project the demand for oil to increase steadily. The statistics noted how oil demand has been rising 1.7 mbd month-over-month through February 21.
“This compares to the 1.6 mbd increase observed during the prior week, likely benefiting from increased travel demand in China and Europe,” the analysts said.