Oil Price Impact on US Inflation to Ease in 2027: DBS
DBS Chief Investment Officer for North Asia Yeang Cheng Ling believes that the impact of rising oil prices on US consumer price inflation will ease in 2027 as supply and demand conditions normalize.
Oil prices have risen by around 50% from last year, but current US consumer price inflation assumptions are based on oil prices of around USD 100 per barrel. Cheng Ling pointed out that the high base set in 2026 would reduce the impact of any further increase in oil prices on inflation next year.
The DBS executive cited Saudi Arabia's oil exports, which stood at around 6 million barrels per day in September, as a sign that oil supply is moving back towards normal levels. He also noted that markets had priced in one more rate hike in 2026, but cautioned that predicting the Fed's policy path has become more difficult.