Falling Oil Prices and Less Hawkish Fed Ignite Rally

Posted by Patrick O'Connor on 8/5/08 12:54 pm

Oil prices fell almost another $3 per barrel today, down to $118.55, and the Fed kept interest rates unchanged at the FOMC meeting, as expected.  However, the market was surprised to learn Fed members voted 10-1 to keep rates steady.  Most thought the voting would be closer after some Fed members publically voiced their concerns about inflation.  For example, Philadelphia Fed President Plosser had been particularly hawkish in recent speeches, and he voted in favor of keeping rates steady.  Only Dallas Fed President Fisher voted for a rate hike, which was no surprise.  He has consistently voted for higher rates.  Read More.

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