Gasoline Prices Unlikely to Bring Down Inflation in 2023

Dillon, Francis; Smith, Andrew Lee; Çakır Melek, Nida

Journal Article

Gasoline Prices Unlikely to Bring Down Inflation in 2023

Abstract: Gasoline prices can influence inflation both directly (by changing prices at the pump) and indirectly (by shaping consumers’ inflation expectations). Through these channels, gasoline prices have played an important role in the run-up and recent decline in inflation. Although gasoline prices have declined from their all-time highs, they are expected to remain relatively stable in 2023. As a result, gasoline prices are unlikely to deliver further reductions in either inflation or inflation expectations this year.

Keywords: inflation (finance); gasoline prices; monetary policy;

JEL Classification: E31; E52; P28;