0.25% rate rise, 1st in 5 years. Will have zero affect on inflation. US Dollar sells, markets rally. Last gasp pump for speculation while inflation is the worst in 40 years. Volatility now showing up in oil. About to reclaim the $100 a barrel, even if China doesn't come back online. Will Europe have the balls to cut Russian oil?

 

As expected Jerome Powell of the Federal Reserve, who, by definition is a yes man for Wall Street, by NOT increasing rates over 0.25% to at least a 50 basis point rise as the worst inflation in 40 years starts to impact everything, sans stocks, to which Powell seems mandated,  by keeping the stock market volatility low and speculation driven as a last resort liquidity provider.  With Bitcoin an inflation, energy absorbing behemoth, also went bid, when the U.S. Dollar, stuck in a 8 year trading range, sold off.  But, not on a 25 basis points rise after 5 years of no rate rises, it would even affect a savings account.  Useless.  Whatcha gonna do huh?   FTW.  

However, if the Fed is trying to contain volatility in stocks, particularly with Ukraine at war with Russia and out of control in inflation, it's going to show up elsewhere.  Namely in the oil market.  

The above chart looks complex, but I wanted to show the oil price with the CBOE Crude Oil Volatility Index (below yellow line.  OVX) and the CBOE Crude Oil Volatility Index (above blue line.  VIX), with the oil price the 'white' line.   The arrow on the VIX, shows the spike in volatility when Russia invaded Ukraine on the 24th February 2022 and on the OVX arrow for the 8th of March, the oil price collapsed down 24% as Hedge Funds that were betting oil, I included, will hold above $115, China was the wildcard with the Omicron virus locking down over 20+ million people.

My point?  Oil is now bid, climbing back to its $100 support and Volatility is going to hit like a freight train.  Stocks, commodities and everything else in between. 

As Russian forces kill more Ukrainian citizens, will the EU cut Russian oil or implement a no fly zone over Ukrainian airspace?

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