The main reason for the lowering of the forecast is a sharp increase in commodity prices and in particular the price of oil, which Fed officials fear could ignite inflation expectations and lift the underlying rate of inflation. On Friday, May 23, the price of oil closed at around $132/barrel. The yearly rate of growth of the price of oil jumped to 106.3% from 72.9% in April.
June 5th, 2008 | Frank Shostak | 2 comments | ContinuedArchive for Frank Shostak
Frank Shostak is an adjunct scholar of the Mises Institute and a frequent contributor to Mises.org. He is chief economist of M.F. Global. Send him mail and see his outstanding Mises.org Daily Articles Archive.
