Stronger oil effects could complicate rate easing despite core inflation excluding oil
Core inflation leaves out oil, but Bitcoin investors are still being told to pay attention to it. Oil's effect on prices has been stronger since 2020, which could make monetary easing harder. So far, the knock-on effects that would spread oil costs into other prices have not appeared.
Why it matters
- Core inflation excludes oil, yet oil can still feed into the wider price picture.
- Oil's pass-through to prices has been stronger since 2020 than it was before.
- A stronger oil effect could complicate monetary easing, which matters for risk assets like Bitcoin.
What to watch next
Watch upcoming inflation reports for any sign of second-round oil effects and for any change in expectations for monetary easing.
