If we rely on recent history, this next batch of government spending will drive up import prices faster than domestic prices. The revision gap will increase, government economists fudging the numbers while trade economists get it right.
However, this would be the fourth spike in import prices driven by federal spending since the crash. Oil traders smell a contango, when flow mismatches stocks and inventory adjustment occur. The queue is too long, as I say, domestic producers might be pre-emptive. If the domestic economy has learned its lesson, then it won't wait, it will began to reduce import consumption today.
I think this is the key experiment here. The issue for domestic producers is: Make an adjustment for oil shortages now, or wait until oil prices jump.
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