Overnight comments from Carl Weinberg of High Frequency Economics

  • Current “epochal lows” in oil prices “may not be sustainable, in which case headline CPI increases could rise back above 1.0% by a year from now”
  • Says that back in 2009, “the y-o-y oil price drop of 55% in Dec 2008 turned into a rise of 83% by Dec 2009″
  • “By July 2009, headline CPI was falling faster than core was rising by 2pp; by July 2010, headline CPI was rising 0.8pp faster than core”
  • “Indeed, history shows that oil prices tend to overshoot equilibrium, suggesting they will be higher a year from now than they are today”

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OK, then