The Federal Reserve is expected to raise interest rates for the first time in three years, with a quarter-point increase anticipated to combat persistent inflation driven partly by elevated oil and gas prices. Fed Chairman Kevin Warsh has signaled the central bank's commitment to restoring price stability, with annual inflation at 3.4% and diesel fuel reaching record highs.
Costco raised its Kirkland Signature motor oil price to $58 and limited purchases to two boxes weekly, while also restricting Mobil 1 oil sales to five packs per membership at $44. The increases stem from Middle East tensions disrupting oil supplies, pushing Brent crude above $109 per barrel and gasoline prices to nearly $4.32 per gallon.
A new study by researchers at UC Santa Cruz and UC Santa Barbara finds that scrapping functioning gasoline vehicles and replacing them with electric vehicles reduces cumulative emissions by 44% for a typical SUV over 16 years, with 92% of modeled scenarios favoring early retirement. The manufacturing emissions of the replacement EV are typically recovered within three years through lower operating emissions, making the environmental case for early vehicle retirement considerably stronger than the "greenest car is already built" argument suggests.
U.S. consumer prices accelerated in August with inflation rising 3.4% year-over-year, driven largely by a 3.9% jump in gasoline prices and higher energy costs. The data reinforced expectations for a Federal Reserve rate hike, with market pricing of a 91% rate hike probability, though some relief emerged in grocery prices amid a Cyclospora outbreak reducing lettuce costs.
An economist estimates that the Iran war has cost U.S. households an average of $860 each through higher energy prices, totaling over $100 billion nationally. The impact has been severe for lower- and middle-income households, while wealthier Americans have weathered the increases better. Oil supply constraints through the Strait of Hormuz persist, and energy prices are unlikely to return to pre-war levels soon.