US Fuel Prices Surge, Stoking Fears Over Inflation Expectations
Summary
- U.S. diesel prices approached $6.50 a gallon, about 18% above the August average.
- U.S. gasoline prices rose to $4.48 a gallon, raising concerns that they could lift consumer inflation expectations.
- If fuel prices continue to rise, they could influence the University of Michigan consumer sentiment index and heighten the Federal Reserve’s inflation concerns.
Forecast Trend Report by Period
Concerns are rising that a sharp increase in U.S. diesel and gasoline prices could lift consumer inflation expectations.
Walter Bloomberg reported on September 21 that U.S. diesel prices climbed to nearly $6.50 a gallon, about 18% above the August average. Gasoline prices also rose to $4.48 a gallon.
With the recent run-up in fuel prices not yet fully reflected in consumer surveys, the University of Michigan’s final consumer sentiment reading due Friday is being closely watched for signs of any shift in inflation expectations.
Business surveys already show stronger price pressures. If that trend persists, it could heighten the Federal Reserve’s vigilance on inflation as it reinforces its hawkish stance.
JH Kim
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