alt Hacker News> The Fed cannot print more oil, and so any efforts to reduce energy inflation with interest rates is going to be futile
Doesn't increasing interest rates reduce demand though? So they can't print more oil, but they can reduce the attractiveness of investments that will require oil, thus indirectly driving prices down?
Replies
Elastic demand, but not inelastic demand. And there is a material amount of inelastic demand across the economy which is keeping demand durable, regardless of interest rates and oil/diesel prices.
In the US, the economy is passing increased money and energy costs to consumers. In China and other countries, they are rapidly electrifying light and heavy vehicles. Different responses to similar economic signals.
It doesn't reduce demand from those that receive interest income.
It reduces the attractiveness of a lot of investments, some that require oil, some that don't, and many that require labor, and that last thing means less jobs.