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What are the implications of rising commodity prices for inflation and monetary policy?
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.
Keywords: Consumer price indexes; Monetary policy; Inflation (Finance);
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Bibliographic Information
Provider: Federal Reserve Bank of Chicago
Part of Series: Chicago Fed Letter
Publication Date: 2011
Issue: May
Order Number: 286