Bond Traders Track Oil as Rising Inflation Bets Muddy Fed’s Job
Bond traders have a new obsession: the cost of oil and gasoline. That’s because commodity prices — especially what consumers pay at the pump — make up an outsized component of inflation expectations, which have been mounting ever higher as Russia’s war in Ukraine intensifies. It’s on the radar of strategists as well as the Federal Reserve, with the central bank set to raise rates this month to combat multidecade-high actual inflation. Economists have long felt that expectations can ultimately exacerbate actual price pressures, with consumer perceptions affected in an outsized way by the cost of a fill-up. The
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