European Central Bank's (ECB) president Mario Draghi, at yesterday's conference cited one of the key argument that stand out against providing larger stimulus has been arguments of hawks that lower oil price has been behind lower headline inflation and pointed that recent decoupling of inflation expectations and oil price could be an indication of end to that.
The figure, from Natixixis, shows that inflation expectation has decoupled since October this year.
Since oil has dropped almost 60%, in just a span of a year, its effect on inflation has been much greater this year. While it is expected to exert its impact over next year too, it will fade due to the base effect. Since consumption has risen sharply, the decoupling might also be pointing to lower impact of oil over inflation.
Nevertheless, it is important to note that this decoupling began in October, when ECB promised more stimulus. So it would be vital to watch out for clues weather its coupling again after yesterday's punitive move.


Gold and Silver Prices Rebound After Volatile Week Triggered by Fed Nomination
U.S. Stock Futures Slide as Tech Rout Deepens on Amazon Capex Shock
Trump Lifts 25% Tariff on Indian Goods in Strategic U.S.–India Trade and Energy Deal
U.S.-India Trade Framework Signals Major Shift in Tariffs, Energy, and Supply Chains
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target
Global Markets Slide as AI, Crypto, and Precious Metals Face Heightened Volatility
FxWirePro: Daily Commodity Tracker - 21st March, 2022
Japan Economy Poised for Q4 2025 Growth as Investment and Consumption Hold Firm
Gold Prices Slide Below $5,000 as Strong Dollar and Central Bank Outlook Weigh on Metals 



