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Since 2021, supply chain issues and soaring logistics costs have contributed to rising inflation, especially among goods. Several relevant indicators merit observation, such as the transportation cost and delivery times data derived from business surveys.
The New York Federal Reserve has constructed a composite index (Global Supply Chain Pressure Index) comprising several indicators from across the world’s major economies. According to the index, the worst appears to be over, although current levels still exceed pre-Covid highs.
In the United States, the rise in the price of goods (excluding those from the food and energy sectors) has been slowing since February, two months after the supply chain pressure index peaked. Having reached a high of 7.7%, core goods price inflation has fallen to 5.4% and as supply chain conditions gradually return to normal, the fall should continue. That being said, inflation in the US economy will continue to be a challenge. Currently, the main contributory factor is the rise in the price of services.
The opinion expressed above is dated September 9th, 2022 and is subject to change.
See also: https://latribune.lazardfreresgestion.fr/en/the-value-of-inflation-linked-bonds/
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