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Fed’s Barkin says sustained high oil prices could ‘dampen’ consumption, growth -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – Crude oil storage containers seen above at Cushing’s oil hub. They appear to be running out of room to accommodate a historical supply glut which has decimated prices. Cushing, Oklahoma. March 24, 2016. REUTERS/Nick Oxford

COLONIAL HEIGHTS (Va.) – A sustained rise in oil prices could impact consumer spending in the United States and increase economic risk, according to Richmond Federal Reserve President Tom Barkin.

“If oil prices do continue to go up … It absolutely is going to increase recorded inflation. Barkin explained that it can also limit spending at an economic symposium. This was one of the ways the conflict may impact America’s economic outlook.

A lot of people, particularly those with lower incomes, spend a large portion of their income on gasoline. So if those prices go up it dampens consumer spending and dampens the economy.”

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