The Ups and Downs of Commodity Price Indexes
Last Updated: 11/17/94
The current concern about inflation began with the run-up in commodity prices at the beginning of 1993. At that time, financial markets overreacted when they interpreted a temporary surge in commodity price indexes as a sign of imminent higher inflation. As it turned out, commodity prices were responding to a variety of short-lived economic events and, contrary to expectation, inflation actually declined in 1993.