Stock returns are negatively impacted by increases in oil prices, while monetary policy can help mitigate this effect. Previous studies have found that stock markets tend to decline when oil prices rise, as higher energy costs can slow economic growth and corporate profits. However, expansionary monetary policy that lowers interest rates makes stocks relatively more attractive investments and can offset some of the negative influence of increasing oil prices on stock returns.
Stock returns are negatively impacted by increases in oil prices, while monetary policy can help mitigate this effect. Previous studies have found that stock markets tend to decline when oil prices rise, as higher energy costs can slow economic growth and corporate profits. However, expansionary monetary policy that lowers interest rates makes stocks relatively more attractive investments and can offset some of the negative influence of increasing oil prices on stock returns.
Stock returns are negatively impacted by increases in oil prices, while monetary policy can help mitigate this effect. Previous studies have found that stock markets tend to decline when oil prices rise, as higher energy costs can slow economic growth and corporate profits. However, expansionary monetary policy that lowers interest rates makes stocks relatively more attractive investments and can offset some of the negative influence of increasing oil prices on stock returns.