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Federal Reserve officials face a ticking clock in their ability to ignore high inflation and are now navigating between their own senses of patience and risk, and a U.S. economy stymied by tangled supply chains, slow hiring and strong consumer demand, Reuters reported. The combination of supply bottlenecks and a surge in household incomes fueled by pandemic-related government aid pushed the personal consumption expenditures price index, a key measure of inflation, to a 30-year high on a year-on-year basis in August. Policymakers still largely expect the pace of price increases to ease without the Fed nudging the process by raising interest rates sooner and higher than expected. Yet that judgment now hinges on a race, in effect. Will disruptions, such as the 100-ship backup at the Los Angeles-Long Beach port complex in California, disappear before households run out of an estimated $2 trillion in excess savings accumulated during the pandemic? And will that happen before recent price hikes show up in public expectations about future inflation? The latter may already be starting. A Fed index of inflation expectations tracked by top officials at the U.S. central bank has risen for an unprecedented five straight quarters. At 2.06%, it is above the Fed's 2% target, and likely rising. Consumer expectations have jumped, too. The Conference Board reported on Tuesday that its one-year consumer inflation expectations survey for October hit 7.0%, the highest since July 2008. Bond markets, also anticipating more inflation, are pricing an earlier start and faster pace to Fed interest rate hikes. "Early on, patience was easy," Fed Governor Randal Quarles said last week. "The fundamental dilemma that we face ... is this: Demand, augmented by unprecedented fiscal stimulus, has been outstripping a temporarily disrupted supply." Yet the economy's "fundamental capacity" remains intact, and Fed officials want to keep interest rates low as long as possible to let employment rise.

Just a few months after filing for chapter 11, mall operator Washington Prime Group has emerged from bankruptcy, The Real Deal reported. When the real estate investment trust, which owns more than 100 malls across the country, filed for bankruptcy protection in June, it listed $4 billion in assets and $3.5 billion in debts. Through the process, the company has reduced its debt by nearly $1 billion. The company also announced that Lou Conforti is stepping down as chief executive officer. Mark Yale, the executive vice president and chief financial officer, and Josh Lindimore, the executive vice president and head of leasing, will serve as interim co-CEOs.

U.S. business activity increased solidly in October, suggesting economic growth picked up at the start of the fourth quarter as COVID-19 infections subsided, though labor and raw material shortages held back manufacturing, Reuters reported. Data firm IHS Markit said on Friday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, rebounded to a reading of 57.3 in the first half of this month from 55.0 in September. A reading above 50 indicates growth in the private sector. A resurgence in coronavirus infections, driven by the Delta variant, weighed on demand for services in consumer-facing businesses like restaurants, hotels and air travel. Together with shortages across nearly all industries, the flare-up in infections curbed economic activity. Gross domestic product growth estimates for the third quarter are mostly below a 3% annualized rate. The economy grew at a 6.7% pace in the second quarter. The government is due to publish its snapshot of third-quarter GDP next Thursday.

President Biden yesterday said that he would consider having the National Guard help deal with the current supply chain issues, The Hill reported. “Yes, absolutely,” the president said at a CNN town hall yesterday when asked if he would consider bringing in the National Guard to help. The White House last week announced that the Port of Los Angeles, as well as FedEx, UPS and Walmart, will rev up operations to 24 hours a day, seven days a week to tackle the supply chain disruptions. “I had a timetable for, first of all, I want to get the ports up and running,” Biden said on Thursday, adding that he got commitments from Walmart and others. The American Trucking Associations said this week the trucking industry is short 80,000 drivers, which is a record high. CNN’s Anderson Cooper asked Biden on Thursday whether he would consider having people serving in the National Guard drive trucks. “The answer is yes, if we can’t move to increase the number of truckers, which we’re in the process of doing,” the president said. The White House this week also addressed the shortage of truck drivers, noting that California Gov. Newsom (D) signed an executive order to tackle the shortage by increasing cargo space and identifying the best routes for trucks.

U.S. Transportation Secretary Pete Buttigieg said on Wednesday he expects disruptions in the trucking industry to last as long as the COVID-19 pandemic persists, Reuters reported. "There are going to be disruptions and shocks to the system as long as the pandemic continues," he said yesterday. He had said on Sunday that supply-chain issues could persist into 2022 as many companies struggle with disruptions. Rating agency Moody's said on Wednesday that the pressure on U.S. supply chains will take time to subside. Increased transportation costs and shortages of commodities and consumer goods will put upward pressure on consumer prices, Moody's said.

The creators of “South Park” are facing competition to buy Casa Bonita, the bankrupt restaurant and family entertainment center outside Denver that was featured in an episode of the TV show, WSJ Pro Bankruptcy reported. Andrew Novick, a Casa Bonita enthusiast who leads a group called Save Casa Bonita LLC, said in court papers Monday that he can do better than the proposed sale to “South Park” creators Trey Parker and Matt Stone. A lawyer representing Parker and Stone in the bankruptcy case declined to comment. Their sale offer, announced on a live-streamed conversation in August with Colorado’s governor, Jared Polis, values Casa Bonita at $3.1 million, court papers show. Any sale requires approval from the judge overseeing Casa Bonita’s chapter 11 case in the U.S. Bankruptcy Court in Denver. Novick said his group is willing to put up $3.5 million for Casa Bonita, a Mexican resort-themed restaurant known for its 30-foot high waterfall, which cliff divers, at times wearing gorilla suits, regularly jump off to entertain guests.

Industrial production fell a sharp 1.3% in September, the Federal Reserve reported yesterday, MarketWatch.com reported. Adding to the sense of weakness in the data, industrial output in August was revised to a fall of 0.1% versus the prior estimate of a 0.4% gain. Capacity utilization fell to 75.2% in September, the lowest rate since April. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities. Some of the weakness was due to Hurricane Ida. The hurricane cut about 0.6 percentage points from the drop in total industrial production, the Fed said. Output at manufacturers fell 0.7% in September, led by a 7.2% drop in production of motor vehicles and parts. Excluding the auto sector, manufacturing was down 0.3%.

Jessica Simpson is back helming her billion-dollar brand, FoxBusiness.com reported. The singer and actress, 41, is once again in charge of her popular Jessica Simpson Collection after its parent company, Sequential Brands Group Inc., filed for chapter 11 protection back in August. Since the filing, Simpson and her mother, Tina Simpson, have been hard at work behinds the scenes getting the actress and singer her company back as she only owned just over a third of the brand – 37.5% – at the time Sequential Brands Group Inc. purchased a majority share from Camuto Group in 2015. The brand is comprised of over 30 product categories, according to Forbes. In 2014, the outlet also noted that the brand brings in about $1 billion per year at retail.

Retail sales rose in September despite rising prices and supply shortages, according to data released on Friday by the Census Bureau, The Hill reported. Sales by retailers, including restaurants and bars, not adjusted for inflation totaled $625.4 billion in September, rising 0.7 percent from August’s revised total of $620.9 billion. The increase defied the expectations of economists, who projected sales to decline as supply chain snarls continue to raise prices. Stores that sell sports equipment, musical instruments, books and hobby products saw the biggest increase in September, with sales rising 3.7 percent last month after falling 3.3 percent in August. Superstores and other general merchandise sellers saw a 2 percent increase in sales last month, while online retail sales rose 0.6 percent after a sharp 5.7 percent-jump in August. Only electronics and appliance stores and health and personal care stores saw sales fall last month.