MNI INTERVIEW: Oil Under $100 No Threat:Richmond Fed's Athreya

By Jean Yung

     WASHINGTON (MNI) - Crude oil prices would need to surge above $100 a barrel

to pose a serious threat to the record-long U.S. expansion, which looks set to

continue this year, Federal Reserve Bank of Richmond economist Kartik Athreya

told MNI in an interview last week. 

     Geopolitical-conflict-driven oil price shocks are not likely to move

inflation in a persistent manner, and could even have some positive impact on

the domestic economy because the United States now produces much more of its own

energy. Athreya said.

     Flaring tensions between the U.S. and Iran after the Trump administration's

strike on a top Iranian general this month pushed oil prices some 10% higher

before falling back late last week. 

     Fed officials have stuck to their line that the U.S. economy is in a good

place at the start of 2020, despite trade and geopolitical uncertainty. 

     "I suspect prices would have to really spike, [to] say $100 or more,

especially if they were expected to persist, before it became too adverse,"

Athreya said. 

     "After all, we produce a lot of oil now and investment in that arena would

likely increase."

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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