What’s boosting interest rate hike speculation and oil prices?

In this week’s video update:

  • Did the U.S. FOMC meeting minutes, released May 18, suggest a June interest rate hike is increasingly likely?
  • As European inflation decreased over the week, what did the European Central Bank’s (ECB) April meeting minutes tell investors about future inflation expectations?
  • The U.S. dollar jumped at the Fed’s meeting minutes this week, but what’s contributing to strengthening oil prices?

On this week’s market update, Chief Investment Strategist Erik Ristuben joins host Blair Lowman to discuss the U.S. FOMC meeting minutes (released May 18), suggesting a June rate hike is still on the table.

What could be the key driver for a June interest rate hike? Ristuben explains that while a U.S. recession may not be imminent—if U.S. economic data continues to remain strong—a June rate hike is likely and would give the Fed some “dry powder” to help prepare for a future recession.

As renewed expectations for a June rate hike in the U.S. weighed on global equity markets, European stocks finished broadly lower for the week. Meanwhile, summary minutes from the ECB’s April meeting provided investors with little insight about future inflation expectations.

On course for a third consecutive week, the U.S. dollar jumped at the hint of a June rate hike while oil prices were spurred to a second week of gains. Ristuben notes growing supply concerns in oil producing countries may have contributed to the boost in oil prices, but there may have been something else driving its continued strength as well.

The episode concludes with a brief discussion about the G71 meeting agenda, currently taking place in Japan.

Be sure to vote in this week’s Twitter poll @Russell_Invest, asking:

What do you think will be the top discussion item at the G7 meeting?

  • Oil prices
  • Global growth
  • Brexit
  • Monetary policy
  • Other (RT your response)

1The Group of 7 (G7) is a group consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The European Union is also represented within the G7.

 

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