Energy Prices May Keep Inflation High for Years

Frequent shocks, big price swings and consistently higher prices could lead consumers to anticipate more inflation, and change their behavior in a way that perpetuates it. AFP

Of all the drivers behind the dramatic rise in U.S. inflation in the past year, perhaps the most acute is the surge in energy prices. It may also be among the most persistent.

High prices for electricity and fuel are likely to put continued pressure on inflation in coming years, forcing central banks to keep interest rates higher than otherwise.