It’s more that central banks, especially ones with a mandate for price and employment/growth stability, “look past” oil price shocks.
They do this because the reduction in growth is usually offset by the increase in prices, so there’s really not much that can be done.
TraderFanFXE on
Well, he can raise rates on April 29, making it the day we read a record number of posts from Donald Trump.
Seriously, there is nothing any central bank could do if energy prices double. Fed, ECB, BoJ etc. could only monitor the data and hope that the Strait of Hormuz gets unblocked. A short-term inflation spike is inevitable.
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It’s not that it’s necessarily limited.
It’s more that central banks, especially ones with a mandate for price and employment/growth stability, “look past” oil price shocks.
They do this because the reduction in growth is usually offset by the increase in prices, so there’s really not much that can be done.
Well, he can raise rates on April 29, making it the day we read a record number of posts from Donald Trump.
Seriously, there is nothing any central bank could do if energy prices double. Fed, ECB, BoJ etc. could only monitor the data and hope that the Strait of Hormuz gets unblocked. A short-term inflation spike is inevitable.