Joe Brusuelas

I anticipate this to continue until clarity on supply chains risk and clear path to ending hostilities is in place. #Econ #EconSky

Volatility in oil markets has been highly unusual for two days.

Risk to energy & food supply chains, misinformation about the security situation in Hormuz & escalation in the region all imply mor volatility not less despite comments yesterday that implied the current conflict could soon end. #Econ

Market Minute: War, oil and inflation swaps With oil exceeding $100 a barrel over the weekend, it won’t be until the March CPI report is released in April that the impact of the conflict will become clear.

Inflation dynamics due to the war in Iran will make the February CPI largely irrelevant but sets the stage for a spike in the March data. #Econ #EconSky

Source: The Real Economy Blog

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Oil prices falling…time to get a 🌮

I would propose a:

1. An extended tariff holiday for business.

2. Gas tax holiday.

Your thoughts??
#Econ #EconSky

Like all of you I’m seeing lots of policy ideas about how to provide relief to consumers and producers.

Assuming ending the war is not an option at this time & it will take weeks for the US Navy to reopen Hormuz.
#Econ #EconSky

Will appear on @BBC to discuss war, energy prices & the global and US economies at 16:30GMT/ 12:30 ET/11:30 CT/9:30PT AM. #Econ #EconSky

So I’m thinking gas tax holiday will be the next talking point out of Washington. #Econ #EconSky

Austin, Texas 7:45 AM CT. Tim stamping this. I paid $3.99 per for supreme. It’s $3.09 for unleaded compared to the current nation average of $3.47. Paid $50.24 for 12.56 gallons. Your mileage may vary. #Econ #EconSky

Market Minute: Global financial conditions, one week into the Iran war With the Strait of Hormuz effectively closed, the current shock is a problem of supply for the oil and natural gas that are critical to the global industrial base.

Global demand destruction has started in Asia. It’s not yet reached the EU, UK or US. The disruption in energy markets is critical to the state of global industrial production. This is about jet fuel, diesel, fertilizer, petrochemicals & plastic. #Econ #EconSky

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For those that sleep. It’s been quite the night. A look at WTI as word on coordinated action by the G-7 to release a portion-25%-of its strategic petroleum reserves.

This will not negate demand destruction that has started. #Econ #EconSky

Below is the 7-day rolling total of west-east traffic of oil tanker crossing through the Strait of Hormuz for your consideration. #Econ #EconSky

I have a good idea what that looks like. One should be actively thinking through the other side of such an intervention into financial markets and physical supply.

With the Strait of Hormuz effectively closed this is now about jet fuel, fertilizer, petrochemicals, plastics and into supply chains.

Think through the logic of the connection between oil prices, supply, commodities and interest rates. If that intervention fails what lies beyond? #Econ #EconSky

The Fed can create electronic reserves; the U.S. Treasury can print money. The U.S. government cannot print oil. If there is an intervention into oil futures market it will require an intervention to the management of physical supply all of which is risky at best. #Econ #Econ

As we get ready for another tumultuous week it is essential to remember that this is about supply.

It is not a function of liquidity or financing. #Econ #EconSky

Iran war muddles expectations of likely Federal Reserve interest rate cuts The surge in oil prices and a softening labour market pose a dilemma for the US central bank

Good morning. My discussion on how the Iran war muddles expectations of likely Federal Reserve interest rate cuts via @FT #Econ #EconSky

giftarticle.ft.com/giftarticle/... Iran war muddles expectations of likely Federal Reserve interest rate cuts

I think the economic pain point for the American public starts around $4.25 per gallon. #Econ #EconSky

A look at the daily national average price of gasoline which stands at $3.41 up from $2.79 less than 60 days ago.

For each $10 dollar rise in the cost per barrel of oil-it equals 42 gallons-the cost per gallon of gasoline should increase roughly by 24 cents. #Econ #EconSky

Market Minute: The U.S. economy and markets after seven days of war The economic imbalances among households across the American economy will become a searing focal point should this conflict endure.

Good morning. My thoughts on the economy after seven days of war. #Econ #EconSky

Source: The Real Economy Blog

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In case one is wondering about gasoline prices and releases of the strategic oil reserve.

I thought you might be…#Econ #EconSky

Those costs will be passed along to consumer and absorbed via thinner margins. #Econ #EconSky

Earlier in the week I said jet fuel would be where the energy shock caused by the war in Iran would show up. Prices are up 115% from one year ago and according to Bloomberg jet fuel accounts for 30% of carrier operating costs. #Econ #EconSky

While the Fed will look through short term volatility in the price of oil and gasoline, it will keep a wary eye on those prices given the effective closure to energy exports out of the Persian Gulf. The Fed will also not over-react to a one-month hiring slowdown. #Econ #EconSky

The price of regular gasoline has increased by 34 cents per gallon to $3.32 per gallon and should increase to near $3.50 in the coming days, up from $2.98 seven days ago. #Econ #EconSky

West Texas Intermediate, the North American benchmark for oil, has increased by $20 per barrel as the war has escalated, implying a short-term bump in inflation of 0.4% with risk of a further increase. #Econ #EconSky

But it is simply not appropriate for the Fed to cut rates given the strong probability that the January personal consumption expenditures index, which will be published on March 13, will feature a 3% increase from a year ago and a core estimate of 3.1%. #Econ #EconSky

The February labor market data in our estimate does not represent a game changer in monetary policy. Newly injected uncertainty around energy prices adds to the degree of difficulty in making judgment calls at the Fed. #Econ #EconSky

War, Rising Oil Prices & Weak Jobs: The Federal Reserve’s reaction function is going to experience a real stress test given a potentially large and persistent energy shock because of the war in Iran and the residual slowing in the pace of hiring linked to policy choices on trade and immigration.

The economy lost 92,000 jobs in February amid strikes and residual weakness The weak February employment data puts the first dent in the low-fire, low-hire framework that has defined the American labor market.

My thoughts on an undeniably weak February Jobs report. One time special factors in healthcare , trade and immigration policy the sources for sustained weakness in goods producing, manufacturing & construction employment. #Econ #EconSky

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