Reuters Morning Bid Week ahead: What the oil shock means for inflation
Apr 4, 2026
They unpack how a sudden oil shock could ripple through inflation and the economy. They discuss differing measures of inflation and why services versus goods matter. They consider how war-driven energy disruption raises uncertainty. They explore how tighter markets can mimic rate hikes and internal splits shaping central bank policy.
AI Snips
Chapters
Transcript
Episode notes
March CPI Will Likely Spike From Energy
- March CPI likely shows a sharp monthly rise led by energy with consensus near 0.9% month-on-month.
- Core inflation is softer at about 0.3% monthly, highlighting energy-driven headline moves separate from underlying goods and services trends.
Fed Focuses On PCE And Persistent Core Inflation
- The Fed watches the PCE measure, which before the Iran war showed persistent core inflation near 3% annually.
- Services inflation and tariffs-affected goods kept core rates elevated before the new energy shock hit.
Duration Of The Conflict Determines Inflation Persistence
- Duration of the Iran war matters for how long the energy-driven inflation persists; markets expect at least a few more weeks of disruption.
- That uncertainty makes it hard to predict if inflation will settle or remain elevated.