The Missing Link
Remember how hard it was to get stuff during the pandemic? Facemasks, new cars, furniture… virtually anything that was made abroad, or used foreign parts, was at some point or another delayed as global supply chains got pummeled.
But things are looking up, and that could be a good sign for inflation, too.
Better Chains, Lower Prices
The New York Fed’s Global Supply Chain Pressure Index dropped to a record-low last month, meaning that the pandemic-era crunch is behind us.
But that doesn’t mean there isn’t more room for improvement. On Monday, the Biden administration unveiled 30 new measures meant to improve supply chains. One of the measures utilizes the Defense Production Act, a legislature typically reserved for war time, to bolster domestic medicine manufacturing and shore up food supply chains.
Here’s how that’s hoped to help inflation: Better, and more stable supply should mean prices won’t spike out of nowhere. By bolstering domestic production and supply, the White House hopes to bring down prices and create disinflationary momentum heading into the new year.
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