Apollo Global Management chief economist Torsten Slok says oil's 22% two-month drop below $80 has already undercut the Federal Reserve's hawkish dot plot, released just 24 hours earlier. WTI crude peaked at $114.58 per barrel on April 7, 2026 and is now near $73, a move Slok says has very significant implications for the inflation forecast. The national average for regular gasoline is now below $4, down from a $4.5 peak on May 11, and energy is one of the few CPI components that flows through to headline inflation within weeks. Slok noted that Fed Chair Kevin Warsh's refusal to provide forward guidance was instantly vindicated when oil prices moved sharply the very next day after the FOMC meeting. Fed funds futures now price a hike in September, a dramatic change from the pre-meeting expectation of January, while JPMorgan's 2026 outlook had assumed roughly 80 basis points of cuts through the year, an assumption Slok says now looks brittle.
JPMorgan Chase & CoJPMorgan's 2026 outlook assumed rate cuts, now brittle; oil drop reshapes Fed path, potentially delaying cuts, which is negative for banks.
Apollo Global Management LLC Class A
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