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Supply Bottlenecks To Have Lingering Impact On Inflation (1/2)

US OUTLOOK/OPINION

The San Francisco Fed released an estimate last week that supply-driven factors are responsible for more than half of the current elevated level of 12-month US inflation, with demand explaining only about 1/3 (the remainder is considered to an "ambiguous" contribution").

  • These constraints "include continued labor shortages and global supply disruptions related to the pandemic and the war in Ukraine".
  • The SF Fed will continue to update supply and demand contribution data while noting "although supply disruptions are widely expected to ease this year, this outcome is highly uncertain."

Source: SF Fed

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