Commercial Insights

The U.S. Inflation Rate vs. The Supply Chain

Wade Fowler, Synovus Trust Company
Feb 11, 2022 • 2 min
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As current supply chain bottlenecks resolve themselves, the extreme level of inflation in the flexible basket will drop substantially.

First, home prices have risen substantially over the past year, which will likely lead to higher rents over time. Second, the labor market is currently very tight, driving wage increases for workers. As these wage increases impact pricing for service industries, we expect to see price increases in that part of that sector as well.

These views are based largely on the assumption that consumer demand will remain relatively stable over the next year, and that pandemic-related disruptions will subside. If demand suddenly increases, or there is an unexpected disruption to the supply of goods again, a more prolonged period of inflation would likely result.

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