Federal Reserve Governor Christopher Waller said Friday he was planning to vote against the central bank’s decision to hold rates steady this week after February’s jobs report showed 92,000 payroll losses.
“I thought that’s it, I’m dissenting,” Waller told CNBC’s Squawk Box. But the closure of the Strait of Hormuz and surging crude prices convinced him otherwise.
Brent crude traded around $107 Friday morning, up roughly 55% from pre-war levels near $68. The United States Oil Fund (NYSE:USO), which tracks WTI crude futures, has surged since the conflict began Feb. 28.
The Fed Cannot ‘Look Through’ This Oil Shock
Waller drew a line between temporary price disruptions and what the Iran war is producing. A “high and persistent” oil shock would not have a transitory impact on inflation, he said, meaning the Fed cannot dismiss it the way it dismissed post-pandemic supply chain noise.
The FOMC voted …
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