Summary
This is an excerpt from CoinDesk newsletter ‘Daybook.’ Sign up here, if you haven’t already.
On Monday, CoinDesk reported that Goldman Sachs was downplaying the chance of the Federal Reserve raising interest rates in September, citing slower inflation and echoing dovish expectations among traders, a potential tailwind for bitcoin BTC$64,288.18.
New data is muddying that outlook.
The first detail is the difference between the price of diesel and the cost of the crude oil used to produce it. The gap, known as the “crack” has surged to a record $102.20 a barrel.
The wars in Iran and Ukraine are disrupting global oil supply and driving the crack wider just as seasonal demand peaks because farmers need fuel to run tractors and harvest crops. That has real implications for inflation on Main Street.
“Food is about to get a lot more expensive,” the Hormuz Letter, a widely tracked X account covering Middle East and commodities news, stated. “Agriculture runs on diesel equipment and shipping, heating oil is next ahead of winter, and everything moved by truck or ship will drive inflation higher.”
Well-known macro writer Mike “Mish” Shedlock put it more bluntly: “Record high crack spreads. Serious economic ramifications.”
