A Federal Reserve staff study published on Nov. 9 estimates a stronger transmission of oil-price changes to underlying inflation for the period beginning in 2021. The analysis pooled data from Canada, the euro area, Japan, the United Kingdom and the United States, covering the years 2000 through the second quarter of 2026.
Key findings
- For the post‑2021 sample, a 10‑percentage‑point increase in relative oil‑price inflation is associated with an estimated 0.14‑percentage‑point rise in core inflation.
- In the pre‑2021 period, the estimated response was about 0.01 percentage point and not statistically significant.
- The study uses core personal consumption expenditures inflation for the U.S. and core consumer price inflation for the other economies.
Implications for monetary policy
The authors note that second‑round effects from the current oil shock have not yet materialized and describe their forward inflation paths as upper bounds rather than official forecasts. A structural simulation suggests that stronger oil transmission combined with more persistent inflation could require tighter policy even as economic activity weakens.
Potential impact on Bitcoin investors
The report does not quantify any effect on Bitcoin prices, but the authors infer that sustained oil‑driven core‑price pressure could delay financing relief and limit risk appetite among investors. An August 2023 IMF working paper found that U.S. monetary tightening reduced a common crypto‑price factor through a risk‑taking channel.
Context
The U.K.’s Office for National Statistics explains that core CPI excludes direct energy components while retaining indirect energy costs in categories such as hospitality, telecommunications and transportation, allowing businesses to pass energy costs into other prices.
The Bureau of Labor Statistics is scheduled to release the October CPI report on Nov. 10, which may provide further insight into core‑inflation trends.
