Pump ‘n dump

The reactions to an interview between two eccentric billionaires has exposed how little most people understand about what drives inflation

Elon Musk, the billionaire boss of Tesla, interviewed presidential hopeful Donald Trump on Monday. More than 1.2m people tuned in to the chat, which Mr Musk streamed on X, his social media platform. Neither of these men is a stranger to controversy. Many of Mr Trump's claims during the conversation set off a storm of rebuttals and fact-checks online. But it was one claim in particular that got your editor's attention. When discussing price increases, Mr Trump said that "inflation was caused by oil." That triggered some keyboard economists. "Trump says inflation is caused by oil… How can people be this stupid?" mused one X-user. So, is Mr Trump right? Did oil cause this round of inflation? Mostly.

The pandemic lockdowns triggered an oil market demand-supply imbalance, which pushed consumer prices up rapidly. Oil prices weren't the root cause—the political response was—but they were what made consumer prices surge. That's because changes in the price of oil typically lead to changes in c…