That's right, nothing gets the market going better than promising a chicken for every pot and yesterday we had the President promising a "phenomenal" tax cut package in 2-3 weeks, as well as reiterating his pledge to "roll back burdensome regulations." Meanwhile, the St. Louis Fed President Jim Bullard said rates can remain low through all of 2017, saying the Fed may only raise rates once this year - two less than expected!
This is nothing more than the classic 1920s Republican Playbook with Trade Tariffs, Deregulation of Industry, Lack of Financial Controls, etc. aimed at creating a false sense of prosperity while money is "hoovered" up by the rich until the economy collapses only this time they have to dismantle that pesky social safety net that was put in place after the last time they destroyed the lives of tens of Millions of families. Go GOP, go!
Meanwhile, as we expected, oil is being talked up into the weekend and we are very close to that $54 line again, boosted by the IEA report which says OPEC's cuts are 90% effective with production down 1Mb/d in January at 32.06Mb/d. PLEASE forget the fact that production was 31.5Mb/d before OPEC ramped up production ahead of the "cuts". Yes, I know, you already forgot, didn't you?
Remember, their original plan was to ramp up production and drive US shale producers out of business. That plan failed so their new plan is to stop producing all that oil nobody wanted anyway and call it a "production cut" and spin it as a reason to drive oil prices higher, which is working great so far as last February oil was $30/barrel and now $54 is up 80%, even though the US just had a 13.8Mb build and we are swimming in oil.
It's all done in the name of screwing over the consumers. Gasoline has jumped 10% from $1.46 on Tuesday to $1.60+ this morning (and a great short into the weekend at that price on /RB), which will cost US drivers about 0.20/gallon at the pump so about $3 per tank/per driver is a nice $150M bonus for "THEM" over the weekend (see this week's posts for more on…