Oil prices have retraced 98% of their recent increase, but gasoline prices have only fallen back about 46%, and the bond market has recovered just 30%.

Gasoline prices tend to rise almost immediately when oil prices increase, but they usually take much longer to come back down. That should begin to improve as OPEC+ has announced plans to increase production.

My take:

These developments are encouraging from both an inflation and bond market perspective.

While no one can predict exactly where interest rates are headed, history reminds us that markets move in cycles. If we pay attention to the data and learn from the past, there appears to be light at the end of the tunnel.

Warsh is a breath of fresh air regarding the true impact of inflation and being able to look forward not backwards. Some Fed voting Presidents want rate hikes. Warsh has signaled that’s not going to happen.

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