If the counterpart oil price increase rate is 10 percentage points higher, core inflation is estimated to rise by 0.14 percentage points.

Federal Reserve Board researchers estimate that since 2021, a 10-percentage-point rise in relative oil-price inflation has lifted core inflation by about 0.14 percentage points, up from a pre-pandemic estimate of 0.01 points that was not statistically significant. The findings, published in a FEDS Notes paper covering Canada, the eurozone, Japan, the U.K. and the U.S. from Q1 2000 through Q2 2026, used core PCE prices for the U.S. and core CPI for the other four economies. The authors stressed the views are their own and not official Fed positions or inflation forecasts. The result matters because it suggests energy costs now pass through to underlying prices more strongly than before 2020, a shift with implications for how central banks weigh oil shocks. What to watch next is whether the elevated pass-through persists in coming quarters and whether the Fed's official communications acknowledge it.