Fed Not Too Worried About Inflation – DBS

Crude oil prices fell on Tuesday on China’s disappointing stimulus announcement, overshadowing fears of a wider conflict in the Middle East, notes Philip Wee, FX strategist at DBS.

Brent erases Monday’s 3.7% gain

“Returning from the Golden Week holiday, the Shanghai Composite Index opened 10% higher on expectations of more fiscal stimulus. However, earnings were cut to 4.6% when the result came in below expectations.”

“Brent fell 4.6% to $77.18 a barrel, erasing Monday’s 3.7% gain to $80.93. While oil prices are up from the lows of the year, they are still below year-ago levels, another reason the Fed is not overly concerned about inflation.”