Over the last 12 months, the CPI-U increased 6.0 percent. (See chart 1 and table A .) Food prices advanced 6.9 percent. Energy prices jumped 34.8 percent, largely the result of an increase in the price of gasoline. The index for all items less food and energy increased 3.6 percent over the year. (See table 1 .) Chart 1.What has checked inflation expectations from tracking oil prices?
Rate hikes in countries including Britain and Norway, and hints from central banks such as the U.S. Federal Reserve, which may signal next week how fast it plans to tighten policy, have checked inflation expectations from tracking oil prices higher.Could energy prices be the Cherry on the inflation cake?
"It could be the cherry on the inflation cake if we don't get a moderation in energy prices," said Frederik Ducrozet, a strategist at Pictet Wealth Management.