Quote:
Originally Posted by blankall
July 2022, during a massive spike in oil prices, the inflation was 8-9%. This year, after another smaller spike, it's 3%. Both in July 2022 and July 2023, oil was contributing to inflation, just to a lesser extent now.
So you can't say that oil isn't driving inflation now, because the price is lower than it was in July 2022. In both July 2022 and July 2023, prices well above averages, and driving inflation. It's just a mater of degree.
|
Maybe we're talking about different things. I'm talking about the annual inflation number which is what monetary policy is based on and what they're trying to get within their target range. Gas prices pre-July 2022 have zero effect on that because they're simply not part of the data, any more than gas prices from 2005 are.
Central banks aren't trying to get prices back to there they were years ago; that would be deflation and it's more dangerous than inflation. They are trying to achieve price stability at current levels, which means ~2% inflation (starting from current prices) going forward.