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NY Fed’s GSCPI Points To Renewed Disinflationary/Deflationary Pressures Ahead

US DATA
  • Released earlier today, the NY Fed’s global supply chain pressure index (GSCPI) fell to a record low at -1.71 standard deviations below average in May for a series starting 1997, continuing its sharp decline from intense supply side challenges of 2H21/1H22.
  • Whilst the Fed is still focused on services and in particular non-housing pressures, it offers some hope that at least goods prices could be due some renewed disinflationary pressure and possible outright deflation after a recent stalling of declines.
  • It tallies with the recent sharp declines in ISM manufacturing and service prices paid components, with the latter falling to its lowest since May’20.

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