INSIGNIFICANT IMPACT

Looking back over the past ten oil price shocks dating back to 1986, the average increase in the price per barrel is 115.5%. Before the shock, Y-o-Y core PCE inflation has averaged 3% and at the end of the shock Y-o-Y core PCE has averaged 3%, no change! What happens is food and energy prices skyrocket but consumers buy less other stuff, as real incomes sink, driving those prices down.