U.S. West Texas Intermediate crude oil traded lower on Thursday as the U.S. Dollar soared on hawkish comments from a widely followed Federal Reserve member. Prices were already trading lower as supply disruption worries eased while rising numbers of COVID-19 cases in China added to worries over demand in the world’s largest crude importer.
Demand Pressured by Stronger US Dollar
Yields rose sharply on Thursday following comments from key Fed speakers on inflation and the pace of further interest rate hikes from the central bank. St. Louis Federal Reserve President James Bullard said Thursday that interest rate hikes from the central bank have had “only limited effects” on observed inflation.
Even under a “generous” analysis of monetary policy the Federal Reserve needs to continue raising interest rates probably by at least another full percentage point, St. Louis Federal Reserve President James Bullard said, arguing that rate hikes so far “have had only limited effects on observed inflation.”
Bullard said that despite aggressive actions by the Fed this year the current target policy rate of between 3.75% and 4% remains below the “sufficiently restrictive” level the Fed feels is needed to lower inflation to its 2% target, Reuters reported.
“While the policy rate has increased substantially this year, it has not yet reached a level that could be justified as sufficiently restrictive, according…