U.S. diesel prices hit record high as bitcoin and gold struggle — SkimNews
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- U.S. diesel prices hit a record $6.29 a gallon this week, up nearly 80% year-to-date per TradingView, driven by Middle East tensions, tight global refinery capacity, and strong freight and industrial demand.
- Bitcoin is down nearly 12% on the year at roughly $76,400, while gold is largely unchanged after retracing from its early-year record of $5,600, according to the article.
- The Federal Reserve is expected to hike rates 25 basis points on Thursday, lifting the benchmark to the 3.75%-4% range, with Goldman Sachs and Morgan Stanley forecasting another 25 bps move in October.
- JPMorgan warned that higher diesel prices feed into inflation through business costs first before potentially affecting consumer prices, depending on pass-through and demand.
- The article argues central banks are mistaken to raise rates into an oil-supply shock, since rate hikes cannot address fuel shortages stemming from conflicts involving Iran and Ukraine.
- The European Central Bank has already hiked rates, and the Bank of Japan is expected to follow with its own hike on Friday, per the article.
Why it matters: The Fed's planned 25 bps hike to 3.75%-4% directly contradicts the article's central warning that monetary tightening cannot fix fuel shortages caused by the U.S.-Israeli conflict with Iran and the war in Ukraine. Truckers, shippers, and ultimately consumers absorb the $6.29 diesel hit while bitcoin's 12% YTD drop and gold's giveback from $5,600 show traditional safe havens losing their hedge appeal in a tightening cycle.
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