Today, Russia announced its plans to cut its crude production by 5% in response to oil price caps and embargoes imposed by the West. Further constrained supply of energy, ergo higher price, threatens to throw a spanner in the works of Jerome Powell’s narrative of the beginning of the “disinflationary” process.
This announcement has also come at a time when the market is still not done pricing in the estimate-crushing employment data for January and its effect on Fed’s monetary stance and peak borrowing costs for interest-rate burdened businesses.
