Oil Price Spike To Cause Stagnation

2025-06-20 08:15:00 ET

Originally published on June 18, 2025

We now believe that the recent surge in oil prices will cause an uptick in inflation, resulting in stagnation. All inflation readings this year have shown declining inflation, with the critical shelter component recently continuing its slow deceleration, dropping from .4 to .3 last month. The decline is likely to continue, as the BLS only updates the index every six months, and it is further lagged by the practice of surveying renewing leases. In fact, our PCE-R index, which utilizes market prices, is already at the Fed’s arbitrary 2% target, and we project that even the reported PCE Core will decline to 2% by mid-next year as the higher shelter readings over the last year roll off....

Read the full article on Seeking Alpha

For further details see: