The significant role of the demand side in manufacturing shortages makes them more “fixable” as reduced policy stimulus lowers demand pressures, while a phasing out of restrictions should unclog supply.
SUPPLY CHAIN STRAIN IN MANUFACTURING
SUPPLY CHAIN STRAIN IN COMMODITIES
SUPPLY CHAIN STRAIN IN LABOR
Fixing Inflation with Moderation
DON't Extrapolate the upswing
We Can Work (Inflation) Out
In 2022, we expect global demand to weaken, while supply responses persist, putting downward pressure on currently elevated prices. This contrasts with the sell-side consensus, which is extrapolating the recent tightness into 2022.
While accelerating U.S. wage growth has become a concern, it still lags inflation, and wage trends in Europe have been fairly subdued. In the past, trailing wages have sown the seeds of inflation’s eventual demise as companies’ pricing power dissipates in the face of consumers’ eroding purchasing power.