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News Link • Oil

WSJ Sounds The Alarm: "There's No Getting Over" Gas At $4 A Gallon

• zerohedge.com by Tyler Durden

And that constraint is  rising gasoline prices, which, as we pointed out last month, could erode the stimulative impact of President Trump's tax plan as they sop up what little money the middle class has been saving.

As prices rise and banks scramble to update their forecasts, the Wall Street Journal has become the latest publication to sound the alarm over what is, in our view, one of the biggest threats facing the US economy in the ninth year of its post-crisis expansion. 

In its story warning about $3 a gallon oil (of course, we're already seeing $4 a gallon in parts of California and other high-tax states), WSJ cited Morgan Stanley's latest projection that rising gas prices could wipe out about a third of the annual take-home pay generated by the tax cuts.

Rising fuel costs can also feed inflation and pressure interest rates. Even though the Federal Reserve typically looks past volatile energy prices in the short term, higher energy costs help shape consumer confidence. And with the central bank poised to be more active this year, rising energy costs pose an additional risk to the economy.

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