SummaryThe Department of Energy (“DOE”) is about to engage in rulemaking to broaden the types of acquisitions it can engage in to help refill the reserve in a manner that is both cost-efficient and consistent with the broader goal of enhancing energy...
Repeated price crashes in a variety of industries led to a situation of underinvestment in productive capacity that created the conditions for the inflation we see today.
Since financial markets are complex and energy policy can be shrouded in legalese, it is worth taking a minute to translate some of the more abstruse language in the DOE’s announcement.
Tightening global financial conditions may serve to reinforce policy tightening, and the Fed should be cognizant of the risk that hikes may have a stronger-than-expected impact in this period of elevated uncertainty.
If we are trying to describe the nature of the real constraints that the economy has been facing over the past 6-12 months, we need a richer economic vocabulary than one that reduces every inflationary constraint to a domestic labor constraint.
