Kaohoon Morning Brief – 19 April 2022

1) James Bullard wants interest rate at 3.5% by year end to slow down inflation

St. Louis Federal Reserve Bank President James Bullard urged on Monday to push the U.S. interest rate to 3.5% by the end of this year to slow down the 40-year high inflation, saying that it is “far too high”.

The Federal Reserve raised interest rates by 0.25 percentage point last month, while signaled for a constant hike in the remaining meeting of this year. 

The market is expecting an aggressive hike of as much as 0.50 percentage point in the meeting, targeting a policy rate range at 2.5%-2.75% by year’s end.


2) Oil prices surge as Libya outage fuels global supply concerns

Oil prices continued to rise after demonstrations against Libyan Prime Minister Abdul Hamid Dbeibah shut down Sharara, the country’s biggest oil field. The outage fueled concerns of global supply shortage amid sanctions on Russian oil. 

On Monday, the international benchmark Brent crude closed above $113 per barrel, the highest since late March, while the West Texas Intermediate closed slightly above $108 per barrel.


3) US dollar hits 2-year high 

The US dollar rose to a two-year high on Monday as Federal Reserve Bank of St Louis president James Bullard urged the central bank to not rule out rate increases of 75 basis points, targeting an interest rate at 3.5% by the end of this year, which is much higher than the market’s anticipation of 2.5%-2.75%.

The dollar index surged to 100.86 on Monday, the highest since April 2020. 


4) The US will lift the mask mandate on planes and public transportation

The U.S. government said on Monday that a mask mandate will not be required for passengers traveling on airplanes and other types of public transportation. The announcement came after a federal judge in Florida voided the mandate.