Today, with inflation at a 40-year high and a policy rate pinned to the zero boundary, policymakers face significant constraints as they try to find ways to mitigate rising costs on American households. … READ MORE >
oil prices
Chart of the day: Consumer sentiment slides amid energy shock
Consumer sentiment slid further in March, falling by 3.1 points from February amid spikes in oil and gasoline prices. The University of Michigan sentiment gauge dropped to 59.7, an 11-year low, according to data released Friday. … READ MORE >
Consumer choice, self-rationing and preparing for shortages
The war in Ukraine, the cutoff of Russian exports and the possible removal of roughly 4.3 million barrels of crude from U.S. and European markets are likely to have a harmful impact on household balance sheets. … READ MORE >
Energy shock will hit low-income Americans the hardest
Despite such a significant price shock, the Federal Reserve should not overreact by hiking interest rates aggressively because the spillovers from higher energy prices on core goods and services will most likely be relatively small and fade quickly. … READ MORE >
The impact of an energy shock on Canada’s economy
Although high oil and gas prices had been good news for the Canadian economy over the past few decades, this time is different. … READ MORE >
Chart of the day: Wholesale gas prices Imply 10.4% Increase at the pump
Geopolitical tensions linked to Russia’s invasion of Ukraine have roiled oil markets around the world. The global Brent crude benchmark has traded around $115 per barrel and the domestic West Texas Intermediate benchmark stood at $112. A year ago, those prices hovered around $60. The elevated levels translate into rising … … READ MORE >
U.S. consumers spend more in January, defying inflation
Personal spending rebounded in January even as inflation rose at the highest rate in decades. … READ MORE >
Energy shock: Potential impact of Russian invasion of Ukraine
A Russian invasion of Ukraine would shave a little less than 1% from gross domestic product over the next year and cause inflation to rise by close to 2.8 percentage points to over 10%. … READ MORE >
Canada runs a trade deficit as imports surge
Canada’s merchandise trade balance in December turned deficit after six consecutive monthly surpluses as imports of consumer goods surged and oil prices dropped. … READ MORE >
Chart of the day: With oil prices elevated, will U.S. production follow?
Our model of the relationship between wholesale gasoline futures and retail gasoline prices implies a decline of 15% to 20% from the current national average of $3.36 per gallon. … READ MORE >