Fuel costs climb, more hikes coming
The rally in energy prices gained momentum Friday, with retail gas prices rising further into record territory, and diesel and heating oil futures setting records of their own amid concerns about strong global demand and tight supplies. Crude oil prices fell modestly as a sharp downturn in the stock market and worries about the economy prompted some profit-taking. But with the Federal Reserve expected to cut interest rates again next week, analysts expect the dollar to weaken further, propelling crude to new records. At the pump, gas prices set records for the fourth day in a row, rising 1.3 cents Friday to a national average price of $3.28 a gallon, according to AAA and the Oil Price Information Service. Average prices are nearing $4 in some parts of Hawaii. Diesel, meanwhile, rose 2.9 cents to a record national average of $3.938 a gallon.
Good inflation news won't last long
Consumer inflation, after pushing relentlessly higher, posted its mildest reading in six months in February thanks to energy and food costs moderating. The relief, however, was expected to be short-lived, given that energy prices have resumed their upward climb. The Labor Department reported Friday that consumer prices were unchanged last month, a better performance than the expected 0.3 percent gain. Core inflation, which excludes energy and food, also held steady in February after a worrisome 0.3 percent jump in January. The better-than-expected February inflation reading probably will be reversed in coming months because of the recent spike in energy prices, analysts said.
Moody's lowers WaMu credit rating
Moody's Investors Service cut Washington Mutual Inc.'s credit rating Friday and said the country's largest savings and loan will need at least $4 billion more than it expected to cover bad mortgages in 2008. Investors sent WaMu's shares down $1.54, or 12.7 percent, to close at $10.59 Friday. Moody's said its action reflects a "rapid deterioration" of the housing market in the first few months of the year. WaMu has estimated it will set aside as much as $8 billion this year to account for borrowers who can't afford mortgage payments.
Consumer Reports offers some advice to couples who are splitting up on divvying up retirement assets.