Extended Oil Shock Spells Higher, Sticky Inflation

Yelena Shulyatyeva discusses the potential for higher gasoline prices due to blockade, limited pass-through to core inflation so far, and the Fed staying on hold. She highlights that AI-related investment drove most GDP growth, posing a concentration risk as consumer spending slows. - Gasoline prices could reach $5 if the blockade persists into summer. - Pass-through of oil to core inflation is limited but could widen if high prices persist. - Fed is on hold due to healthy labor market and new chair coming. - Rate cuts projected for next year as normalization, not market-driven. - AI investment accounted for 80% of Q1 GDP growth. - Consumer growth is slowing, making the economy reliant on a narrow sector. - Demand destruction and significant economic slowdown are expected eventually.