The Power of Oil

sentinelblog

From Alhambra Investment Partners, by Jeffrey P. Snider

For the first time in 57 months, a span of nearly five years, the Fed’s preferred metric for US consumer price inflation reached the central bank’s explicit 2% target level. The PCE Deflator index was 2.12% higher in February 2017 than February 2016. Though rhetoric surrounding this result is often heated, the actual indicated inflation is decidedly not despite breaking above for once. In many ways 2.12% is hugely disappointing, at least for policymakers and those in the media cheering them. For consumers there is no good amount of inflation.

If it took a nearly 80% rise in WTI just to generate calculated inflation barely above the target mark, then nothing really has changed. As the base effects of oil pass into history, so will the Fed’s chance to claim success in the one place where “money printing” should make…

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