The Battle of Inflation
How bad will U.S. inflation get?
The Iran War has driven oil prices to levels not seen in years, and that will very likely push the Consumer Price Index (CPI) to as high as 4.3% next month or sooner. That would be the highest level in over three years.
If one looks at core inflation (which excludes volatile energy and food prices), the rate may not move much for months. It stands at 2.9% and could remain there for another quarter or two. To the average consumer, this is cold comfort.
Inflation looms large for Federal Reserve policymakers as they gear up for their first gathering under new Chairman Kevin Warsh in a week’s time. Debates continue over whether a rate hike should be back on the table.
Pinch Points
The crisis in the Straits of Hormuz is only the most recent and visible example. The issue of “pinch points” is front of mind daily for those in logistics and supply chain. There are hundreds of them, and maybe thousands, depending on the specific supply chain.
A few years ago, drought limited traffic through the Panama Canal, and attacks by the Houthis in the Red Sea also disrupted shipping. Before that, pirates harassed that same area and were active in the South China Sea. Port congestion dominated concerns during the pandemic; hurricanes and typhoons shut down sea routes. The list is endless.
How are you building workarounds and substitutes to maintain cost-effective supply chains?
Read more on how today’s news and other global items are affecting the supply chain.
