Oil prices sank on Thursday as the Fed’s hawkish comments sent the dollar higher.
Crude oil is down more than 1% on Thursday afternoon, with WTI falling 1.32% at $71.20 per barrel, and Brent down 1.57% to $73.22. Both prices are still up on the week, but down nearly $2 from Wednesday highs.
Jerome Powell on Wednesday afternoon said that rising inflation is most transitory, but suggested there is also a risk that inflation may prove to be more persistent than the Feds expected. The Federal Reserve said that it may lift rates as early as in 2023—a year earlier than previously expected.
The ICE U.S. Dollar Index (DXY)—a measure of the dollar against a basket of six rivals–was up 0.9% at 3:43pm EDT.
That strong dollar played a big part in sending oil prices down. With commodities prices in the dollar now more pricey for those with other currencies.
