The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
It may be difficult to believe but as mentioned in my previous post, this is a new era for oil . And the next question to ask is how low can oil prices go? Well, if the analysts were correct, the oil can still go lower...and it might fall a lot more. OPEC's decision not to cut production was obvious: to put and cause pain to US shale drillers, but it's providing holiday gift for consumers. OPEC members Thursday followed the lead of Saudi Arabia, which has said it did not want to cut production and has made it clear it will defend its market share against other producers. Those producers include the U.S. shale industry, which has helped boost U.S. production by a million barrels a day in just a year. OPEC member Venezuela sees the world oversupplied by 2 million barrels a day. And if the US oil production were to continue to increase, the oil prices will definitely fall even lower. This is very likely to happen especially over the next three to fo...