Daily update
Daily update
- The IEA announced it would orchestrate a record release of oil from strategic petroleum reserves. Another three ships were attacked in the Gulf. Oil prices rose over USD100/barrel. In the absence of a coherent US strategy to reopen the Strait of Hormuz, investors are likely to focus on Iranian actions as the market driver.
- Yesterday’s February US consumer price inflation data was as expected. The lived reality is somewhat different from the headlines. Owners’ equivalent rent helped lower inflation, but this is a fantasy price no one pays. Used car prices fell, but US households do not buy a used car every month. Grocery price inflation has accelerated recently, with big increases for beef, coffee, and chocolate. A Snickers bar’s price is important in shaping inflation perceptions.
- Consumers should maintain spending levels in the near term because savings rates can be adjusted to afford tariffs or gasoline prices. There is a limit to how long this can go on. Asian countries are trying to moderate demand—things like working from home, which increases efficiency and lowers energy consumption.
- The US is investigating additional tariffs against the EU and China—though these will not hit consumer prices for some time. Bank of England Governor Bailey, a proper economist, is to speak.