Post by Federal Reserve Bank of Boston

What is the size of the oil price shock from the U.S.-Iran conflict, and what risks does it pose to inflation and national employment?     A 33% oil price shock – an estimate of the shock from the U.S.-Iran conflict – is now associated with a 1.5 percentage point increase in PCE inflation over the subsequent year but essentially zero impact on national employment. A new Boston Fed study by Danilo Leiva-León, Giovanni Olivei, Ara Patvakanian, Jenny Tang, and Egon Zakrajšek explores these questions and shares what this could mean for monetary policy.    Read the full brief: https://lnkd.in/eMUiR3aA Read the key findings in this slideshow: