Oil prices surge to two-week winning streak as Iran supply fears grip markets
The Fed’s Beige Book, which was released on Wednesday, said, “Cost pressures due to tariffs were a consistent theme across all districts.” Only two of the 12 Fed districts reported slight price growth, while the other 10 reported stronger price pressure. This effectively means that the Fed may not cut key interest rates at its next FOMC meeting, unless they are worried about a lackluster job market and feel they have to cut key interest rates again to stimulate job growth.
The 5.1% rise in existing home sales for December may be a sign that the housing market is starting to recover. The median home sales price in December was $405,400, up 0.4% compared to a year ago, so home prices are not appreciating significantly.
The Commerce Department announced that retail sales rose 0.6% in December, which was better than economists’ consensus estimate of a 0.5% increase. October retail sales were revised to a 0.1% decline, down from the initial estimate of a 0.2% increase. Fully, 10 of the 13 categories surveyed reported a sales increase in November, so this was an excellent report and will help to sustain strong GDP growth.
Three ships that can launch missiles and an aircraft carrier are headed to the Middle East in an attempt to intimidate Iran’s leadership. Crude oil prices anticipate that Iran’s crude oil may disappear from world markets and effectively starve the Iranian regime. So, it appears that President Trump is preparing to do more than just impose sanctions and a 25% tariff on Iran’s trading partners.
There have been intense diplomatic negotiations underway between Arab nations and Iran. President Trump on Wednesday said Iran had stopped killing anti-regime protesters and would not execute those it accused of trying to topple the government, appearing to narrow the possibility that the U.S. was about to launch military strikes against the country. Specifically, Trump told reporters that the U.S. had been notified Iran had “no plans to carry out any executions of protesters.” Trump added, “That has just gotten to me, some information, that the killing has stopped, that the executions have stopped … they are not going to have an execution, which a lot of people were talking about for the last couple of days. Today was going to be the day of execution.”