Before supply chain breakdowns and shortages swept the world in the wake of the COVID pandemic, buying the bits and pieces for an assembly line was often as easy as clicking a button and waiting a few days or, at most, a few weeks for delivery. Not anymore as shortages of metals, plastics, wood and even liquor bottles are now the norm, Reuters reported. The upshot is a world where buyers must wait for delivery of items that were once plentiful, if they can get them at all. Along with the shortages come hefty price increases, which has fueled fears of a wave of sustained inflation. There’s growing tension among Federal Reserve policymakers over how to gauge the long-term impact on prices. Some Fed policymakers are more convinced than others that price pressures will recede after some of the supply chain disruptions are resolved. How this debate evolves could influence how quickly the Fed moves to reduce the pace of asset purchases launched at the start of the pandemic, and how soon it lifts the policy interest rate from its current level near zero.
