"Gasoline prices are rising - up more than 30% in a month, the largest increase in such a short span since Hurricane Katrina in 2005. Fertilizer is stuck at Middle East export hubs, potentially disrupting planting seasons from Iowa to Africa."
"At some point, you have to stop calling it bad luck. It is time to start asking whether supply shocks are coincidence - a series of uncorrelated, unfortunate events - or whether something larger is going on that has changed the economic landscape for the long-term."
"When asked at a press conference this week to make sense of serial supply shocks, the U.S. central bank chairman, Jerome Powell, seemed to miscalculate the common denominator. 'I don't know that the world has changed in a way that there will be more supply shocks,' he said."
"That's a dangerous world view - and it's one the Fed has reached before. After Covid, the Fed called inflation 'transitory' and was slow to raise interest rates."
Since 2020, global supply chains have faced multiple shocks, including the Covid pandemic, Russia's invasion of Ukraine, U.S. tariff policies, and now conflict in the Persian Gulf. These events have led to rising gasoline and diesel prices, stock market declines, and recession concerns. Economists are questioning whether these supply shocks are mere coincidences or indicative of a larger, long-term change in the economic landscape. The Federal Reserve's current perspective may overlook the significance of these recurring disruptions, which could necessitate a reevaluation of economic strategies.
Read at Fortune
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