02069cas a2200265 a 4500 AALejournalIMF011766 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475502633 1018-5941 BD-DhAAL BD-DhAAL Celasun, Oya. Commodity Prices and Inflation Expectations in the United States / Oya Celasun, Lev Ratnovski, Roxana Mihet. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students U.S. monetary policy can remain extraordinarily accommodative only if longer-term inflation expectations stay well-anchored, including in response to commodity price shocks. We find that oil price shocks have a statistically significant, but economically small impact on longer-term inflation compensation embedded in U.S. Treasury bonds. The estimated effect is larger for the post-crisis period, and robust to controlling for measures of liquidity risk premia. Oil price shocks are also correlated with the variance of longer-term inflation expectations in the University of Michigan Survey of Consumers in the post-crisis period. These results are not attributable to looser monetary policy - oil price increases were associated with expectations of a faster monetary tightening after the crisis. Overall, the findings are consistent with some impact of commodity prices on long-term inflation expectations and/or on inflation rate risk. Mode of access: Internet Mihet, Roxana. Ratnovski, Lev. IMF Working Papers; Working Paper ; No. 2012/089 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/089/001.2012.issue-089-en.xml IMF e-Library