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Federal Reserve Bank of Chicago
Chicago Fed Letter
What are the implications of rising commodity prices for inflation and monetary policy?
Charles L. Evans
Jonas D. M. Fisher
Abstract

The recent run-ups in oil and other commodity prices and their implications for inflation and monetary policy have grabbed the attention of many commentators in the media. Clearly, higher prices of food and energy end up in the broadest measures of consumer price inflation, such as the Consumer Price Index. Since the mid-1980s, however, sharp increases and decreases in commodity prices have had little, if any, impact on core inflation, the measure that excludes food and energy prices.


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Charles L. Evans & Jonas D. M. Fisher, "What are the implications of rising commodity prices for inflation and monetary policy?" , Federal Reserve Bank of Chicago, Chicago Fed Letter, issue May, 2011.
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Keywords: Inflation (Finance) ; Monetary policy ; Consumer price indexes
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