Bloomberg reports Atlanta Fed President Dennis Lockhart said the recent drop in oil prices form their peak should help slow inflation, but weakness in the overall economy may continue into 2009. In a television interview, Lockhart said the drop “certainly… helps a great deal. The outlook for the second half of the year and going into 2009 is we’ll see some alleviation of inflation pressures. Having oil and other commodities come down so strongly helps.”
This comes just as the Labor Department reported yesterday that consumer prices rose the fastest in 17 years in July where the consumer price index rose 5.6%.
From the Bull Pen: Is crude oil due for an oversold bounce? Bulls can look to the oil ETF (USO) with sell-stops below $90.
From the Bear Cave: Continental Airlines (CAL) may see a rally if oil prices retreat, but the challenges the company faces remain. Bears can fade (read: sell) the stock into the $20 mark.
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