He says oil has further to fall once the fighting is over.<\/p>\n
\u201cI think we\u2019re looking at, as it were, a fundamental fair value for the oil price is probably around $80, $85 a barrel, something like that,\u201d he said. \u201cThat\u2019s where we probably settle \u2026 in a postwar environment.\u201d<\/p>\n
The fall took some geopolitical risk out of the market, he said, \u201cbut what we haven\u2019t changed is the fundamentals of supply and demand\u201d.<\/p>\n
Federal Reserve risks<\/p>\n
The bigger risk sits with the Federal Reserve.<\/p>\n
Before a single vote was cast, Mr Donovan said the Senate mattered most for monetary policy, because Fed governors need its confirmation. With \u201ca great deal of \u2026 Democrat anger at the administration\u201d, a Democratic Senate could refuse US President Donald Trump\u2019s nominees or drag the process out.<\/p>\n
\u201cFor the most part, I don\u2019t care about \u2026 ambassadorships or frankly even cabinet posts most of the time, but the Federal Reserve \u2026 that matters,\u201d he said.<\/p>\n
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<\/p>\n
How low can oil go? UBS Wealth Management’s chief economist on postwar prices<\/p>\n
If governors leave and their seats stay empty, the five voting regional Fed presidents gain weight, and \u201cthe regional Fed presidents tend to be somewhat more hawkish than the governors\u201d, he said.<\/p>\n
Even so, he expects little tightening.<\/p>\n
\u201cSo I think rate hikes in \u201927, if we get any, we maybe get one,\u201d he said. \u201cThe inflation actually isn\u2019t persistent.\u201d<\/p>\n
It only feels that way.<\/p>\n
\u201cThe problem is we\u2019ve had a whole succession of one-off distinct inflation shocks, which the central banks can do very little about,\u201d he said.<\/p>\n