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Oil Prices And Inflation Expectations: Is There A Link?
Sunday, August 23, 2015 6:09
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by St Louis Fed
– this post authored by Alejandro Badel and Joseph McGillicuddy
Between January 2011 and June 2014, Brent crude oil prices fluctuated around an average price level of $110 per barrel. Between June 2014 and January 2015, oil prices dropped precipitously, stabilizing at about $55 per barrel. This pattern was accompanied by a reduction in breakeven inflation expectations, which, in the case of the five-year forward rate, dropped from 2 percent at the end of June 2014 to 1.30 percent at the beginning of January 2015.[1] Since then, the five-year breakeven inflation rate has increased steadily, reaching 1.72 percent by the end of April.
Source: http://econintersect.com/pages/contributors/contributor.php?post=201508230759
