Federal Reserve's Milan Discusses Oil Impact on Inflation

Federal Reserve Board member Milan has stated that policy decisions should not be based on short-term news headlines. According to PANews, Milan emphasized that it is too early to assess the current situation. The traditional central bank view holds that oil shocks do not affect core inflation, and the labor market still requires monetary policy support. The situation remains unclear, making it difficult to determine if monetary policy should respond to current events. It is premature to conclude that oil prices will impact other prices. Rising energy prices suppress demand, offsetting some inflation effects. It would be highly unusual for the Federal Reserve to react to oil shocks at this time. While oil price increases could lead to inflation, this has not yet occurred. The pre-war policy outlook remains unchanged, with current policy still pointing towards interest rate cuts. Four rate cuts are still expected by 2026.