Markets were rocked last week due to a dramatic drop in oil prices. This week we discuss what to make of it.
The plunge in the price of oil should act like a shot of adrenaline to the world economy. But, there will be winners and losers. Overall, the effect of cheaper oil is clearly positive. The Economist magazine provides thoughtful analysis.
Falling oil prices will encourage the Fed to keep interest rates lower for longer, because falling oil prices will reduce already-low inflation still further. Lower oil prices will reduce the headline inflation rate at a time when the Fed is trying to raise underlying inflation, according to David Wessel, writing in The Wall Street Journal.
The dark side of the oil shock. Pessimists have made a lot of noise. If pessimists have a case, it is in oil producers in the emerging world, especially Russia. But, among oil importers in the developed world, it is hard to see much of a dark side, according to Gavyn Davies of the Financial Times