{"id":13679,"date":"2022-11-23T16:06:04","date_gmt":"2022-11-23T13:06:04","guid":{"rendered":"https:\/\/roboforex.com\/blog\/?p=13679"},"modified":"2024-04-15T13:51:33","modified_gmt":"2024-04-15T10:51:33","slug":"is-the-interest-rate-growth-cycle-coming-to-an-end","status":"publish","type":"post","link":"https:\/\/roboforex.com\/blog\/2022\/11\/23\/is-the-interest-rate-growth-cycle-coming-to-an-end\/","title":{"rendered":"Is the Interest Rate Growth Cycle Coming to an End?"},"content":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<html><body><p>Market participants expect that the US Federal Reserve (Fed) monetary policy tightening cycle is coming to an end. The US&nbsp;<a href=\"https:\/\/roboforex.com\/blog\/2022\/06\/30\/what-is-inflation-reasons-and-consequences\/\">inflation<\/a> rate&nbsp;eased to&nbsp;7.7% in October, further strengthening the belief that the regulator's head, Jerome Powell, will soften his rhetoric. Against this background, the <a href=\"https:\/\/roboforex.com\/beginners\/info\/charts\/indices\/us500indexcash\/\" data-internallinksmanager029f6b8e52c=\"313\" title=\"SP 500\">S&amp;P 500<\/a> index (US500) is up 15% in two months.<\/p>\n\n\n\n<p>Is there really any reason for optimism? In this article, we will try to analyse what is happening to the US economy now, what parameters Mr. Powell is focusing on, why the <a href=\"https:\/\/roboforex.com\/blog\/2022\/06\/30\/what-is-inflation-reasons-and-consequences\/\" data-internallinksmanager029f6b8e52c=\"220\" title=\"Inflation\">inflation<\/a> rate fell in October, and whether there is a chance that this dynamic will continue in the future.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_parameters_does_Jerome_Powell_monitor\"><\/span>What parameters does Jerome Powell monitor?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After the COVID-19 pandemic <a href=\"https:\/\/roboforex.com\/blog\/2021\/06\/11\/how-to-trade-in-forex-during-crises\/\" data-internallinksmanager029f6b8e52c=\"186\" title=\"Crisis\">crisis<\/a>, we saw a sharp rise in inflation. At the time, many investors were saying that it was time to raise the <a href=\"https:\/\/roboforex.com\/blog\/2019\/10\/22\/trading-news-how-to-earn-on-interest-rates\/\" data-internallinksmanager029f6b8e52c=\"90\" title=\"Interest rate\">interest rate<\/a>, otherwise, it would not be possible to control inflation with monetary means.<\/p>\n\n\n\n<p>In his speeches, Jerome Powell said that inflation is temporary, there is no need to rush to tighten the monetary policy, and the interest rate hike will start after unemployment has fallen to 2019 levels.<\/p>\n\n\n\n<p>In March 2022, the unemployment rate fell to 3.8% in line with pre-crisis levels, and the Fed started a cycle of interest rate hikes already in April.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/FRS.png\"><img loading=\"lazy\" decoding=\"async\" width=\"758\" height=\"420\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/FRS.png\" alt=\"Diagram of unemployment and interest rate data\" class=\"wp-image-13681\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/FRS.png 758w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/FRS-360x200.png 360w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/FRS-150x83.png 150w\" sizes=\"(max-width: 758px) 100vw, 758px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Diagram of unemployment and interest rate data<\/em><\/figcaption><\/figure>\n\n\n\n<p>Many market participants are now wondering when the Fed will bring its monetary policy tightening cycle to an end. On 3 November, Jerome Powell said: \"Before rates peak, we need to see a sustained decline in inflation and a series of declining monthly figures will be good evidence of that. Continued rate hikes will be needed to have a sufficiently restrictive effect on the economy and bring inflation back to the Fed's 2% target.\"<\/p>\n\n\n\n<p>This means that one month's data would not change anything, while all the attention of the head of the regulatory body is currently not on the labour market, but on the inflation rate.<\/p>\n\n\n\n<div class=\"block-banner violet-dark_blue\">\n    <div class=\"block-banner__content\">\n      <div class=\"block-banner__text-content\">\n        <p class=\"block-banner__title\">Copy Top traders now!<\/p>\n        <p class=\"block-banner__text\">Join Copy Trading Service, select traders from the top rankings, and start copying their strategies today!<\/p>\n      <\/div>\n    <div class=\"block-banner__images-wrapper\">\n      <img decoding=\"async\" class=\"block-banner__image block-banner__image_mobile\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2023\/09\/copyfx-mobile.png\" alt=\"partner-programme\">\n    <\/div>\n      <a href=\"https:\/\/my.roboforex.com\/en\/register\/\" class=\"block-banner__button\" target=\"_blank\" rel=\"noopener nofollow\">Start Investing<\/a>\n    <\/div>\n    <div class=\"block-banner__images-wrapper\">\n      <img decoding=\"async\" class=\"block-banner__image block-banner__image_desktop\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2023\/09\/copyfx-desktop.png\" alt=\"partner-programme\">\n    <\/div>\n  <\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Has_the_US_economy_suffered_from_the_Feds_actions\"><\/span>Has the US economy suffered from the Fed&#8217;s actions?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A further interest rate hike could bring down the US economy &ndash; this is the view increasingly being relayed by the media. If we look at the rate increase, it has risen from 0.25% to 4% in 7 months. Such an increase was only seen in the 1970s during the economic crisis, which was accompanied by high inflation.<\/p>\n\n\n\n<p>The first thing we will look at when seeking to find out whether the US economy has been hurt by the Fed's actions is the labour market. Yes, large companies &ndash; like <a href=\"https:\/\/roboforex.com\/beginners\/info\/charts\/stocks\/META\/\" data-internallinksmanager029f6b8e52c=\"259\" title=\"Meta Platforms Inc\">Meta Platforms Inc.<\/a> (NASDAQ: META), <a href=\"https:\/\/roboforex.com\/beginners\/info\/charts\/stocks\/TSLA\/\" data-internallinksmanager029f6b8e52c=\"275\" title=\"Tesla Inc\">Tesla Inc.<\/a> (NASDAQ: TSLA), and Snap Inc. (<a href=\"https:\/\/roboforex.com\/blog\/2022\/06\/17\/nyse-probably-main-stock-market\/\" data-internallinksmanager029f6b8e52c=\"303\" title=\"NYSE\">NYSE<\/a>: SNAP) &ndash; have reported layoffs, but if we take a look at the number of layoffs in the country, we can see that the figure has been declining since 2021.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/UV.png\"><img loading=\"lazy\" decoding=\"async\" width=\"765\" height=\"388\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/UV.png\" alt=\"Data on layoffs in the US\" class=\"wp-image-13683\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/UV.png 765w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/UV-360x183.png 360w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/UV-150x76.png 150w\" sizes=\"(max-width: 765px) 100vw, 765px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Data on layoffs in the US<\/em><\/figcaption><\/figure>\n\n\n\n<p>At the same time, the number of vacancies is at its highest level in 10 years.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/VAC.png\"><img loading=\"lazy\" decoding=\"async\" width=\"762\" height=\"441\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/VAC.png\" alt=\"Data on the number of vacancies in the US labour market\" class=\"wp-image-13684\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/VAC.png 762w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/VAC-346x200.png 346w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/VAC-150x87.png 150w\" sizes=\"(max-width: 762px) 100vw, 762px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Data on the number of vacancies in the US labour market<\/em><\/figcaption><\/figure>\n\n\n\n<p><a href=\"https:\/\/roboforex.com\/blog\/2019\/10\/29\/trading-news-how-to-make-money-on-gdp\/\">GDP<\/a> is not giving negative <a href=\"https:\/\/roboforex.com\/blog\/2019\/11\/28\/signals-on-forex-where-to-search-how-to-find-filter-and-create\/\" data-internallinksmanager029f6b8e52c=\"101\" title=\"Signals\">signals<\/a>: its annual growth rate has dropped to the average of the last 10 years and currently stands at 1.8%.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GDP.png\"><img loading=\"lazy\" decoding=\"async\" width=\"767\" height=\"447\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GDP.png\" alt=\"US GDP growth rate\" class=\"wp-image-13685\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GDP.png 767w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GDP-343x200.png 343w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GDP-150x87.png 150w\" sizes=\"(max-width: 767px) 100vw, 767px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>US <a href=\"https:\/\/roboforex.com\/blog\/2019\/10\/29\/trading-news-how-to-make-money-on-gdp\/\" data-internallinksmanager029f6b8e52c=\"93\" title=\"GDP\">GDP<\/a> growth rate<\/em><\/figcaption><\/figure>\n\n\n\n<p>Production capacity is utilised at 80%, which is in line with pre-crisis levels.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/PRO.png\"><img loading=\"lazy\" decoding=\"async\" width=\"768\" height=\"397\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/PRO.png\" alt=\"Data on capacity utilisation in the US\" class=\"wp-image-13686\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/PRO.png 768w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/PRO-360x186.png 360w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/PRO-150x78.png 150w\" sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Data on capacity utilisation in the US<\/em><\/figcaption><\/figure>\n\n\n\n<p>The number of bankruptcy filings in the country is at its lowest in 25 years.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANKRUP.png\"><img loading=\"lazy\" decoding=\"async\" width=\"761\" height=\"394\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANKRUP.png\" alt=\"Information on bankruptcy filings in the US\" class=\"wp-image-13687\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANKRUP.png 761w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANKRUP-360x186.png 360w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANKRUP-150x78.png 150w\" sizes=\"(max-width: 761px) 100vw, 761px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Information on bankruptcy filings in the US<\/em><\/figcaption><\/figure>\n\n\n\n<p>In comparison, in the UK, the figure is approaching the highs of the last 25 years.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANRUP-UK.png\"><img loading=\"lazy\" decoding=\"async\" width=\"762\" height=\"392\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANRUP-UK.png\" alt=\"Information on bankruptcy filings in the UK\" class=\"wp-image-13688\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANRUP-UK.png 762w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANRUP-UK-360x185.png 360w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/BANRUP-UK-150x77.png 150w\" sizes=\"(max-width: 762px) 100vw, 762px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Information on bankruptcy filings in the UK<\/em><\/figcaption><\/figure>\n\n\n\n<p>Perhaps the full effect of the interest rate hike will be felt by the economy later, but for now, things are good in the US. To understand whether there is a risk of a renewed rise in inflation, let's look at other important financial <a href=\"https:\/\/roboforex.com\/blog\/2019\/11\/19\/top-10-forex-indicators-that-every-trader-needs\/\" data-internallinksmanager029f6b8e52c=\"99\" title=\"Indicators\">indicators<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_is_inflation_rising\"><\/span>Why is inflation rising?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Inflation in the US and around the world began to rise sharply due to the disruption of supply chains caused by the COVID-19 pandemic. Freight costs rose, which had an impact on the final cost of goods. Logistics problems were resolved over time, and while there was a shortage of shipping containers, there is now a surplus of them sitting idle in ports.<\/p>\n\n\n\n<p>However, once the logistics situation improved, inflation continued, supported by high commodity prices. For example, <a href=\"https:\/\/roboforex.com\/blog\/2020\/05\/15\/how-to-make-money-on-oil\/\">oil<\/a> is still traded at almost USD 100\/barrel. But to better understand the situation, let's look at the behaviour of the price of black <a href=\"https:\/\/roboforex.com\/beginners\/info\/charts\/metals\/xauusd\/\" data-internallinksmanager029f6b8e52c=\"43\" title=\"XAU\/USD\">gold<\/a> after the 2008 and 2020 crises.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/OIL.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"895\" height=\"745\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/OIL.jpg\" alt=\"Graph of the cost of oil\" class=\"wp-image-13689\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/OIL.jpg 895w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/OIL-240x200.jpg 240w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/OIL-768x639.jpg 768w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/OIL-150x125.jpg 150w\" sizes=\"(max-width: 895px) 100vw, 895px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Graph of the cost of oil<\/em><\/figcaption><\/figure>\n\n\n\n<p>Oil prices went from a low in 2009 to a high in two years. Later on, the situation followed a similar pattern, with a low in 2020 and a high in 2022. After 2011, the price of black gold started to fall. Given this, it can be assumed that this course of events could also be repeated.<\/p>\n\n\n\n<div class=\"block-banner dark_blue-pink\">\n    <div class=\"block-banner__content\">\n      <div class=\"block-banner__text-content\">\n        <p class=\"block-banner__title\">Top trading conditions with a Prime account<\/p>\n        <p class=\"block-banner__text\">Low commissions, spreads starting from 0 pips, leverage up to 1:300, and execution in as fast as 0.1 sec<\/p>\n      <\/div>\n    <div class=\"block-banner__images-wrapper\">\n      <img decoding=\"async\" class=\"block-banner__image block-banner__image_mobile\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2023\/09\/prime1-mobile.png\" alt=\"prime-account\">\n    <\/div>\n      <a href=\"https:\/\/my.roboforex.com\/en\/register\/prime\/\" class=\"block-banner__button\" target=\"_blank\" rel=\"noopener nofollow\">Open Prime Account<\/a>\n    <\/div>\n    <div class=\"block-banner__images-wrapper\">\n      <img decoding=\"async\" class=\"block-banner__image block-banner__image_desktop\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2023\/09\/prime1-desktop.png\" alt=\"prime-account\">\n    <\/div>\n  <\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_do_oil_prices_affect_inflation\"><\/span>How do oil prices affect inflation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For a better understanding of the relationship between the price of black gold and inflation, let's take a look at a graph of US gasoline prices and inflation data.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-INF.png\"><img loading=\"lazy\" decoding=\"async\" width=\"760\" height=\"392\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-INF.png\" alt=\"US petrol prices and inflation data\" class=\"wp-image-13690\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-INF.png 760w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-INF-360x186.png 360w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-INF-150x77.png 150w\" sizes=\"(max-width: 760px) 100vw, 760px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>US petrol prices and inflation data<\/em><\/figcaption><\/figure>\n\n\n\n<p>Since 2005, there has been a <a href=\"https:\/\/roboforex.com\/blog\/2022\/03\/17\/how-to-use-correlation-calculator-for-currency-pairs\/\" data-internallinksmanager029f6b8e52c=\"307\" title=\"Correlation\">correlation<\/a> between these values: when the price of fuel falls, inflation goes down, and vice versa. In 2022, this correlation has intensified.<\/p>\n\n\n\n<p>The cost of fuel in the US is directly related to oil prices &ndash; look at the graph.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-OIL.png\"><img loading=\"lazy\" decoding=\"async\" width=\"761\" height=\"530\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-OIL.png\" alt=\"Graph of the cost of oil and gasoline in the US\" class=\"wp-image-13691\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-OIL.png 761w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-OIL-287x200.png 287w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/GAS-OIL-150x104.png 150w\" sizes=\"(max-width: 761px) 100vw, 761px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Graph of the cost of oil and gasoline in the US<\/em><\/figcaption><\/figure>\n\n\n\n<p>Given the data presented above, it can be assumed that if oil prices fall, inflation will follow suit. This decline would soften the Fed's rhetoric, which would have a positive effect on stock <a href=\"https:\/\/roboforex.com\/forex-trading\/assets\/indices\/\" data-internallinksmanager029f6b8e52c=\"11\" title=\"indices trading\">indices<\/a>. But will oil prices decrease?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_could_prevent_oil_prices_from_falling\"><\/span>What could prevent oil prices from falling?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The main difference between the developments after the 2008 crisis and what is happening now is the level of black gold production. In 2011 and later, oil prices were under considerable pressure from a sharp rise in this indicator.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/CRUDE.png\"><img loading=\"lazy\" decoding=\"async\" width=\"763\" height=\"395\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/CRUDE.png\" alt=\"Data on the number of rigs in the US\" class=\"wp-image-13692\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/CRUDE.png 763w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/CRUDE-360x186.png 360w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/CRUDE-150x78.png 150w\" sizes=\"(max-width: 763px) 100vw, 763px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Data on the number of rigs in the US<\/em><\/figcaption><\/figure>\n\n\n\n<p>The number of oil rigs currently is not higher than in 2019. This suggests that supply in the market is growing at a slow pace. And daily demand, according to the statistics below, has already reached pre-crisis levels and is only expected to increase further.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/POT-OIL.png\"><img loading=\"lazy\" decoding=\"async\" width=\"799\" height=\"563\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/POT-OIL.png\" alt=\"The daily global oil demand figures  \" class=\"wp-image-13693\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/POT-OIL.png 799w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/POT-OIL-284x200.png 284w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/POT-OIL-768x541.png 768w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/POT-OIL-150x106.png 150w\" sizes=\"(max-width: 799px) 100vw, 799px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>The daily global oil demand figures<\/em><\/figcaption><\/figure>\n\n\n\n<p>Demand for oil is likely to increase further in the near future.<\/p>\n\n\n\n<p>In <a href=\"https:\/\/roboforex.com\/blog\/2021\/10\/28\/main-order-types-in-trading\/\" data-internallinksmanager029f6b8e52c=\"311\" title=\"Order\">order<\/a> to contain inflation, the Joseph Biden administration decided to sell oil from strategic reserves. As a result, the reserves have fallen to 450 million barrels, which is the lowest level since 1984.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/RES-OIL.png\"><img loading=\"lazy\" decoding=\"async\" width=\"638\" height=\"359\" src=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/RES-OIL.png\" alt=\"Data on the amount of oil in the US strategic reserves\" class=\"wp-image-13694\" srcset=\"https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/RES-OIL.png 638w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/RES-OIL-355x200.png 355w, https:\/\/roboforex.com\/blog\/wp-content\/uploads\/2022\/11\/RES-OIL-150x84.png 150w\" sizes=\"(max-width: 638px) 100vw, 638px\" \/><\/a><figcaption class=\"wp-element-caption\"><em>Data on the amount of oil in the US strategic reserves<\/em><\/figcaption><\/figure>\n\n\n\n<p>The US congressional elections are over and there was no information about new sales from strategic <a href=\"https:\/\/roboforex.com\/forex-trading\/assets\/stocks\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"invest in stocks\">stocks<\/a>. However, it was reported that the US now intends to replenish reserves, which would create additional demand in the oil market and could push the price of black gold up.<\/p>\n\n\n\n<p>In order to curb oil prices, it is now necessary to slow down the country's economy significantly, and this can be done through <a href=\"https:\/\/roboforex.com\/blog\/2022\/03\/24\/quantitative-tightening-and-how-it-influences-markets\/\">Quantitative tightening (QT)<\/a> and changes in the monetary policy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_do_investors_expect\"><\/span>What do investors expect?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The US interest rate is currently at 4%. Market participants are working ahead of the curve and are setting expectations for a maximum rate of around 5%. This can be seen in the one-year treasury bonds: The yield is now 4.78%, and the maximum was at 4.84%.<\/p>\n\n\n\n<p>In other words, the market has already factored in a rate hike of 0.75-1%. The surprise will be a further tightening of the monetary policy, which could result in a rate hike above 5%. And this event is quite possible if oil prices continue to rise.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If next month's inflation data is below the previous statistics or on the same level, then this will reinforce investors' belief that rates will not rise above 5%. A rally in the stock market would then be inevitable, with the current movement in the stock indices just the start of another uptrend.<\/p>\n\n\n\n<p>However, if the value is higher next month, then the Fed will have to raise interest rates even further. Market participants would not take this lightly, and stock indices might once again test the October lows.<\/p>\n\n\n\n<p>Separately, it is important to keep an eye on oil prices as they currently play a key role in what will happen with inflation.<\/p>\n\n\n\n<p class=\"wp-block-button aligncenter\">\n<a class=\"button button-green\" href=\"https:\/\/my.roboforex.com\/en\/register\/\" rel=\"nofollow\">Open Trading Account<\/a><\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"<p>In this article, we will try to analyse what is currently happening to the US economy, what parameters Mr. Powell is focusing on, why inflation fell in October, and whether there is any chance that this dynamic will continue in the future.<\/p>\n","protected":false},"author":22,"featured_media":13701,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[2747,1072],"class_list":["post-13679","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-inflation-in-economy","tag-sp-500-index"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is the Interest Rate Growth Cycle Coming to an End? 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