Rising Gas Prices Fuel Lasting Inflation Expectations
A recent study by the San Francisco Federal Reserve Bank found that rising gas prices have a lasting impact on household inflation expectations.
The report, which analyzed data from June 2013 to June 2025, discovered that a 10% change in expected gas price growth was associated with a 0.24% increase in one-year inflation expectations.
According to the study, this means that consumers who come to expect higher gas price growth also tend to anticipate higher inflation.
The authors of the report noted that the relationship between gas prices and inflation expectations is 'modest, but statistically significant.'
The finding comes as Americans are experiencing higher fuel costs due in part to global energy supply chain disruptions stemming from the war with Iran.