Commodities Trend Break!

Take a look at this chart of the CRB index of commodity prices. After a period of steady increases, the CRB has recently experienced a noticeable (if not significant) break in that upward trend. Of course, oil is an important component of the CRB so much of the index's price erosion is due to the recent decline in energy prices.

Our take? Ultimately, commodity prices are driven by the forces of supply and demand. So perhaps the trend break reflects some slowing in economic activity. The good news, to the extent the CRB reflects inflationary pressures in the economy, its recent fall is further evidence that inflation has at the very least stabilized for the time being.