When the price of oil rises, the price of everything else rises. It’s a near-universal rule owing to the fact that virtually all goods and services involve the use of oil at some stage of the supply chain that brings them from producer to consumer. The most unwelcome consequence of this rule is that when economies are in an already precarious situation, inflation-wise, higher oil prices are the last thing they need. And yet higher oil prices are exactly what the troubled U.S.
And there is no other producer capable of doing this. What this means is that the Federal Reserve’s decision to delay the start of rate cuts will hold for longer than many must have hoped. It also means that the European Central Bank’s decision to keep interest rates in the eurozone unchanged at the record high of 4% even though March inflation surprised positively, declining to 2.4% from 2.6% from February. If the ECB was reluctant to start cutting rates with an inflation rate of 2.