Here’s why the Fed can ease off on interest rate rises in one NatGas Chart (1)

Nov. 2, 2022 — Opinion by CarrZee

The Federal Reserve might even be able to reverse rate rises, or at least increase them at a slower pace.

This chart from exchange group ICE shows how global natgas prices have dropped by two thirds since the August peak, easing the need to boost interest rates.

The Dutch contract is a proxy for a global natgas price, which is a crucial determinate of electricity prices. These prices surged because of the war in Ukraine, prompting inflation and interest-rate rises around the world.

NatGas is now taming inflation so the Fed doesn’t need to do it, so much. Holding off on increases would protect the global economy (and mums and dads with debt).

Chart is in Euros/MWh. Peak in August was 350 euros/MWh.

Gas prices rebounded today (Wednesday) to 125 euros from 116 euros yesterday.


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