Oil Crisis Is Not Just A Domestic Issue, It’s A Global One
- Wholesale price index shows positive signs when energy prices are excluded, suggesting core inflation is a better metric.
- Oil crisis is a global issue, not just domestic, with potential impacts on fertilizer prices and manufacturing.
- US economy is slowing but less vulnerable to recession than other countries, though Fed's policy decisions remain debated.
Oil Crisis Is Not Just A Domestic Issue, It’s A Global One
Tony Katz explored the impact of the ongoing oil crisis on the global market. Joining Tony is Dr. Matt Will, an economist at the University of Indianapolis, who shares his insights on the recent wholesale price index and its implications for the economy.
The recent wholesale price index, which showed a 5% increase, but a more modest 0.1% increase when energy is removed from the equation. Dr. Will explains, “If you really start digging into what the numbers mean, you’re gonna start drinking… and I’m not talking about the good kind of drinking.” He’s referring to the fact that the numbers are actually quite positive, especially when considering the core inflation rate, which is a more accurate measure of the economy’s health.
One of the key takeaways from the episode is the importance of understanding the nuances of economic data. Dr. Will notes that the wholesale price index is a good indicator of the economy’s health, but it’s not the only factor to consider. He says, “The ISM report is a far better gauge of where things are… it explains each other.” This highlights the need to look beyond surface-level data and consider the broader economic context.
We also discuss the impact of the oil crisis on the global market, including the potential effects on fertilizer prices and the manufacturing sector. Dr. Will explains that the oil crisis is not just a domestic issue, but a global one, and that the US is not as dependent on global oil as other countries. He notes that the market has already priced in the worst-case scenario, and that the recent increase in oil prices is not as bad as it seems.
Another topic we explore is the relationship between the Producer Price Index (PPI) and the GDP. Dr. Will explains that the PPI is a leading indicator of the economy’s health, and that the recent revision in the PPI is consistent with the GDP revision. He notes that the economy is slowing down, which could lead to a recession, but that the US is not as vulnerable to a recession as other countries.
The episode also touches on the recent comments from Treasury Secretary Scott Bessett, who said that it’s okay for the Federal Reserve to wait to lower rates amid the oil surge. Dr. Will is skeptical of this statement, saying that it’s not a sincere move, but rather an attempt to justify the Fed’s inaction. He notes that the market has already priced in the worst-case scenario, and that the recent increase in oil prices is not as bad as it seems.
If you’re interested in understanding the complexities of the oil crisis and its impact on the global market, this episode is a must-listen. Dr. Will’s insights provide a clear and concise explanation of the economic data and its implications. So, tune in to hear the full conversation and gain a deeper understanding of the current economic landscape.
Listen to the “Oil Crisis Is Not Just A Domestic Issue, It’s A Global One” discussion in full here:
Listen to the show in full here:
Watch the show here:
Archived episodes here:
ABOUT THE SHOW
Tony Katz Today airs from 12-3pm ET on 93.1 WIBC/Indianapolis
What are we talking about? Politics, breaking news, political theory, art, the markets, food, libations and whatever else may come to mind.
PLEASE SUBSCRIBE TO THE PODCAST
Tony Katz Today on Apple Podcasts
