Fed Risks Repeat of 2008 Policy Disaster Amid Rising Oil Prices

Oil prices have been steadily rising, reaching near $100 per barrel. In response to this surge, Wall Street strategist James Thorne has issued a warning to the Federal Reserve: raising interest rates during an energy supply shock could repeat the policy disaster of 2008.

Thorne, chief market strategist at Wellington Altus, argues that the Fed should not tighten financial conditions and suppress demand under an energy shock. He draws a parallel between the current situation and the events leading up to the 2008 financial crisis.

The ECB has already raised interest rates in response to inflation triggered by the Iran war, and markets expect another hike soon. Thorne believes that the ECB has repeated the mistake made before 2008.