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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US OUTLOOK/OPINION
Even if supply-side pressures on inflation ease in the U.S., it may be well into 2023 before there is any substantial relief for core price pressures from bottlenecks.
- Over the past few decades, supply chain bottlenecks have impacted core inflation with a lag. Peaks and troughs in bottleneck pressures as measured by the NY Fed's Global Supply Chain Pressure Index have coincided a year later with corresponding year-on-year core inflation peaks and troughs.
- The bottoms in 2010 and 2020, and peaks in 2012 and 2019 correspond well, as does the sharp rise in 2021-22 (see chart).
- This makes intuitive sense, as production constraints, shipping delays etc do not feed into price gains immediately, but rather take time to move through the consumer chain.
- While not all supply-side driven inflation is supply chain related (much is due to labor market tightness as well), the lingering upside inflationary pressures from bottleneck issues look likely to persist well into 2023 before abating (and even that assumes that they begin to subside soon).
Source: BLS, NY Fed, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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