How the Fed Can Help the Corner Grocer Keep the Lights On
March 13, 2020
Excerpt below...
Cheaper Gas = A $1.4B Tax Cut
Cumberland Advisors Market Commentary
March 10: The Saudi-Russia price war means OPEC disarray and a lower oil price for the U.S.
The Energy Information Administration (EIA) reports: “In 2019, about 142.23 billion gallons (or about 3.39 billion barrels) of finished motor gasoline were consumed in the United States, an average of about 389.68 million gallons (or about 9.28 million barrels) per day.”
Let’s look at the impact of a price change. If the Saudi-Russia oil-price war lasts a year, for the American economy every penny per gallon that the gas price declines will be equivalent to a $1.4 billion consumption tax cut for the American economy. Estimates of the likely gasoline price change now range from a 30 to 40 cents per gallon cut to a 70 to 80 cents per gallon cut. No one estimates the price will rise.
—David Kotok
Read more "How the Fed Can Help the Corner Grocer Keep the Lights On" at Barron's website (Paywall): https://www.barrons.com/articles/how-the-fed-can-help-the-corner-grocer-keep-the-lights-on-51584138193
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