Jan 30, 2024
U.S. Treasury Secretary Janet Yellen recently asserted that the U.S. economy has not experienced “meaningful” spillovers from conflicts in the Middle East. This viewpoint, however, is not universally accepted.
Billionaire John Catsimatidis, founder and CEO of Red Apple Group, openly criticized Yellen's perspective during an interview with FOX Business.
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“I am disappointed in Janet Yellen, how stupid she could be?” he said bluntly.
The business mogul, whose conglomerate includes energy companies, highlighted the influence of the Middle East on the oil market, a crucial element of the economy.
“Last time I was here with you guys, oil was $69 a barrel. We're on our way towards election year, and what do the OPEC nations do? They stir the pot and they create the problem,” he said, mentioning the Houthis militia group believed to be backed by Iran. “And oil now is $76, $77 a barrel.”
Catsimatidis seemed disturbed that rising oil prices benefit certain countries. He explained, “For every $1 that oil goes up — we burn 100 million barrels a day in the world, and I think half of it is Russia and OPEC and those nations — well, that's another $100 million a day, or $50 million.”
The Republican donor and vocal Donald Trump supporter talked about how soaring oil prices have affected Americans and was critical of the Biden administration's actions in the energy industry.
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“[Oil was] at $50, $55 a barrel when President Trump left. And don't forget the Iranians were drilling 400,000 barrels a day at $50, $55 a barrel — chump change," he said. “President Biden has allowed them to go to four million barrels a day and we made them zillionaires and we gave them enough money through our world money, making our people in North America poor, the poor people poorer, the middle class poorer. We gave them a lot of money.”
State of the US economy
Despite the concerns surrounding high oil prices, other indicators suggest that the U.S. economy remains robust.
For instance, in Q4 of 2023, real GDP in the U.S. increased at an annual rate of 3.3% according to the Commerce Department’s advance estimate. This growth significantly exceeded economists' expectations of a 2% increase.
The labor market also demonstrates resilience. The latest jobs report revealed that in December 2023, nonfarm payrolls increased by 216,000, surpassing economists’ projection of 170,000. The unemployment rate held steady at 3.7% — near a multi-decade low.
Factoring in December’s numbers, the U.S. labor market added a whopping 2.7 million jobs in 2023.
The headline inflation rate has also subsided. In December, the U.S. consumer price index saw an annual increase of 3.4%, down from its peak 9.1% increase in June 2022. However, it should be noted that the price of many necessities, like food and shelter, remain elevated.
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Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
