- Jim Cramer, host of “Mad Money” on CNBC, warns about the growth in crude oil prices and their possible influence on the policies of the US Federal Reserve.
- The sustained rise in oil could trigger inflationary pressure on the U.S. economy, which could lead the Federal Reserve to consider raising interest rates.
- The price of crude oil is approaching $100 per barrel, raising concerns about its impact on consumers and businesses, and Cramer warns of potential turbulence in financial markets.
Jim Cramer, the well-known host of “Mad Money” on CNBC, has issued a warning about rising crude oil prices and their possible impact on the decisions of the United States Federal Reserve.
This warning comes just before the next Federal Reserve meeting (Thursday this week), where important decisions related to interest rates and monetary policy are expected.
According to Cramer, the continued rise in crude oil prices could cause a significant increase in inflation in the US economy.
In his latest television episode, Cramer stressed that Federal Reserve Chairman Jerome Powell may be forced to consider a further increase in interest rates in response to this growing inflationary threat.
Although the Federal Reserve is expected to keep the Fed Funds rate at 5.50% at its next meeting, Cramer warns that another hike should not be ruled out, given the current circumstances.
Cramer argues that Powell is more concerned about controlling inflation than preserving profits, jobs, corporate balance sheets or even consumer spending.
Powell faces the difficult task of explaining whether inflation is still trending downward, an argument that becomes more complicated as crude oil prices continue to rise.
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Impact of crude oil price
The price of crude oil has recently surpassed $90 per barrel, and some analysts predict it could reach $100 in the near future. This increase in fuel costs raises concerns about its potential effects on the entire economy, impacting both consumers and businesses.
At the same time, Cramer warned about the possibility of “turbulence” in the markets if the Federal Reserve announces a surprise increase in interest rates. His comment has raised concerns among investors and increased uncertainty at a time when markets are already grappling with various economic and geopolitical challenges.
Analysis of the price of crude oil
Oil prices suggest that we could be seeing an uptrend in the short term. With the price of crude oil approaching $100, it is approaching the first target after forming an inverted Shoulder-Head-Shoulder pattern.
If this trend persists, we could see historically high levels of between $115 and $125 per barrel. Furthermore, technical indicators, such as the monthly squeeze momentum indicator, indicate that the price of oil could continue to rise, which would be another sign of being able to continue the bullish trend towards $115-125.
Cramer’s warning and analysis of oil prices spark a debate about the future direction of the US economy and the Federal Reserve’s policies.
Investors and analysts will be watching the Federal Reserve meeting this week for signs on how they will confront these evolving economic challenges.