Could the recent crude oil price movements be the beginning of a pullback in prices at the pump? I’m not sure how long the decline in crude oil prices will continue, but for now it looks as if Americans are actually reducing our consumption of oil and barring any major increases in consumption by developing nations this slide could continue and prove to be somewhat sustainable.

While I don’t think gas will fall much below $4 per gallon, it would be nice to have it not continue its march toward $5. Oil prices are down about 10% this week after skyrocketing to $145 per barrel. One metric not holding back the price of oil is inflation which clocked in at over 1% during the month of June, significantly higher than analysts expected and an almost certain indication of impending Federal Reserve rate hikes to try to keep that number at bay. But an increase in the Fed Funds rate will almost certainly hurt many homeowners whose mortgage interest rates will be resetting over the next 12 months and thus damage consumer discretionary spending and further depress the US economy.

One job I certainly wouldn’t want right now is that of Federal Reserve Chairman Ben Bernanke.

[tags]gas prices, oil, mortgage, interest rates, fed funds, bernanke, federal reserve, crude oil[/tags]