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Fed Destroys Mainstream Meme, Admits Low Oil Prices "Could Dampen Economic Expansion"

When even The Fed is unable to keep its story straight on the impact of low oil prices, the entire facade of 'household spending' enhancement must collapse (as the data shows). After six months of lower prices, retail spending is still tumbling... and it appears The Fed is finally fessing up... "persistently low energy prices... could damp the overall expansion of economic activity for a period, especially if the slowing took place after most of the positive effects of lower energy prices on growth in household spending had occurred."

 Wait what!?

 

OH come on - now they're just punking us. I thought low oil was a huge tax cut that'd be spent on iPhones? pic.twitter.com/Kzj8meaG6B

— Rudolf E. Havenstein (@RudyHavenstein)

From The Fed Minutes:

"Several participants noted that there were signs of layoffs in the oil and gas industries, and that persistently low energy prices might prompt a larger retrenchment of employment in these industries.

 

In addition, it was observed that if capital investment in energy-producing industries slowed significantly, it could damp the overall expansion of economic activity for a period, especially if the slowing took place after most of the positive effects of lower energy prices on growth in household spending had occurred."

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