How does the price of oil interact with inflation and the monetary policy meant to keep it in check? It’s complicated. New analysis by Ilia Bouchouev, a senior fellow at the Oxford Institute for Energy Studies and a managing partner at Pentathlon Investments, explores these questions.
The relationship between oil prices and macroeconomic variables has been the subject of intense debate. This is particularly important in the current environment when market participants are trying to position
“Energy Quantamentals:
themselves either for interest rate cuts or, alternatively, for interest rates staying elevated for much longer. Specifically, what does it mean for the oil market, and can the price of oil itself impact the highly anticipated
monetary policy decision? This Energy Comment attempts to shed some light on how to look at such a complex relationship between oil and key macro-economic factors, including inflation, interest rate, and the U.S. dollar.
Oil and Macroeconomic Feedback Loops,” Ilia Bouchouev, Oxford Institute for Energy Studies, May 2024
Read the full commentary published by the Oxford Institute for Energy Studies on May 13, 2024.
