Ward blames Fed for surging oil price

New Star's Simon Ward has put the blame for ballooning oil prices at the door of the Fed rather than ...

New Star’s Simon Ward has put the blame for ballooning oil prices at the door of the Fed rather than commodity speculators. The economist said $140 a barrel oil threatens to abort the expected second-half US growth recovery and excessive Fed easing is the prime cause. “The Goldman Sachs commodity price index stabilised from mid 2006 as the Fed moved its target Fed funds rate above 5%,” he said. “The explosion upwards started only when the Fed went into reverse and cut rates aggressively from last autumn. Prices have risen by over 60% in less than nine months – equivalent to the gain ov...