• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 25 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 hours How Far Have We Really Gotten With Alternative Energy
  • 5 hours If hydrogen is the answer, you're asking the wrong question
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 18 hours Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 4 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)

Oil Prices Fall On Biggest Fed Rate Hike Since 1994

In its largest hike since 1994, the Federal Reserve raised rates by three-quarters of a percentage point, or 75 basis points, with oil prices responding by drawing down just under 1%. 

Wall Street had largely anticipated a 75-basis point hike, and oil prices were down 1% on Wednesday, ahead of the Fed meeting, regaining some ground by the time of the rate hike announcement. 

At 2:13 p.m. EST, just minutes after the Fed release, Brent was trading down 0.62% on the day, at $120.42. WTI was trading at $118.10, down 0.70%.

The Fed also signaled that more rate hikes were to come, with another potential three-quarters of a percentage point hike in July. A half percentage point hike is possible for September

In a Wednesday press release the Federal Open Market Committee (FOMC), said “overall economic activity appears to have picked up after edging down in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures”.

“The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks,” the FOMC statement read. 

The rate hike follows a half-percentage point hike in May. 

Oil prices also settled lower on Tuesday in anticipation of an interest rate hike of 75 basis points. Earlier expectations were for a 50-basis-point hike. The shift in sentiment came after a strong consumer price index report for May raised expectations of a much higher rate hike. 

ADVERTISEMENT

By Tom Kool for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • steve Clark on June 23 2022 said:
    Last time inflation was this high the overnight rate was some where between 12 -14%
  • steve Clark on June 23 2022 said:
    To Dave -

    So true. People do not understand even the basic's today.
  • Dave Baldwin on June 16 2022 said:
    Media friendly interest rates going up, real interest rates (base rate minus inflation) still going down.. potentially if debt free, never been a better/ cheaper time to borrow money and pay back in inflated Dollars.. this is apparently monetary tightening for magical thinking..

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News