Rates To Rise

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What's Happening Today

Good morning! It's Kristin with your daily morning digest.

Russia's invasion of Ukraine is still ongoing, but the crisis hasn't swayed the Federal Reserve or global oil producers.

Federal Reserve Chair Jerome Powell said in prepared remarks released this morning that interest rate hikes are still coming in March, despite the uncertainty of the Russia-Ukraine conflict. He pointed to high levels of inflation and a strong labor market as reasons to raise rates.

Hiking interest rates helps lower inflation, which is welcome news to all of us who are paying more for just about everything. But interest rate hikes also mean that borrowing money (like for a mortgage or personal loan) will be more expensive.

When it comes to the labor market, private payrolls (or the number of people working in the private sector) increased by 475,000 in the month of February, according to the latest figures from ADP. The number was higher than economists expected, and could point to a stronger February jobs report from the government on Friday (which strengthens the Fed's argument to raise rates).

Oil cartel OPEC and its allies (known as "OPEC+") also decided today to stick to their oil production plans, despite pressures to raise production and concerns about supply disruptions from Russia. Oil prices have been soaring, with crude passing $112 a barrel earlier this morning.

President Joe Biden in his State of the Union address last night said that the U.S. will work with other countries to release 60 million barrels of oil from strategic reserves to help fight rising oil prices. But that amount might not make much of a dent in oil or gas prices—in 2020, the U.S. used close to 20 million barrels of oil per day. Higher oil prices means higher gas prices, which currently cost an average of about $3.66 per gallon.

- Kristin

Editors' Picks

Fed Stays Course on Anti-Inflation Interest Rate Hikes (The Balance)

February Saw Solid Private Sector Job Growth, ADP Says (The Balance)

Oil Jumps to Highest Since 2011 as OPEC Holds Output Steady Despite Russia's War on Ukraine (CNBC)

Russia-Ukraine War Complicates Fed's Inflation Fight (The Balance)

Biden Says Fighting Inflation Is 'Top Priority' as Prices Bite Consumers (The New York Times)

Off the Charts

The government has been easing pandemic-related restrictions, and more people are going out again—but so far that's not translating into eating out more, and not because we're fearful. No, this time it's food prices.

With inflation at the highest in nearly 40 years, consumers are increasingly substituting groceries for eating out to stretch their monthly food budgets, a recent Morning Consult survey found.

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Number of the Day

35 Cents - That's how much the wholesale price of a gallon of gas spiked in some parts of the U.S. Tuesday because of the Russian invasion of Ukraine.

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