The latest U.S. consumer price index revealed an increase of 3.5% for March on an annual basis.
by Irina Slav
Oil Price
When the price of oil rises, the price of everything else rises. It’s a near-universal rule owing to the fact that virtually all goods and services involve the use of oil at some stage of the supply chain that brings them from producer to consumer.
The most unwelcome consequence of this rule is that when economies are in an already precarious situation, inflation-wise, higher oil prices are the last thing they need. And yet higher oil prices are exactly what the troubled U.S. and European economies are currently getting. And it might get worse.
The latest U.S. consumer price index revealed an increase of 3.5% for March on an annual basis. The number was higher than expected and immediately put an end to talk from Fed officials that the coming months could see the start of rate cuts after an extended series of hikes aimed at reining in the latest bout of worrying inflation that followed the pandemic and the start of the war in Ukraine—which happened to be marked by a surge in oil prices.