The slide in oil leaves Fed with a slick dilemma

On the one hand, falling oil prices act as a big tax cut for consumers, potentially fuelling the recovery. But it could also wreak havoc on the Fed's plans to raise rates.

Just when the US economy appears to be gathering momentum, nudging investor attention to when interest rates will start to rise, the collapse in the price of oil poses a fresh headache for the US Federal Reserve as it considers its next move.

A halving in the price of oil -- including a 10 per cent dive this week to below $US50 a barrel -- brings a unique policy dilemma to the table.


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