Supply chain pressures may have peaked, says NY Fed

The global supply chain pressures blamed for disrupting the flow of goods and sparking high inflation may have finally peaked, according to a new gauge from the New York Federal Reserve.

The Fed’s new tool, which it unveiled in a blog post Tuesday, shows global supply chain pressures at dizzying levels. But it suggests those problems may have peaked in what could bring a welcome reprieve for a White House trying to quell fears about inflation levels not seen since Ronald Reagan was president.

The new metric, called the Global Supply Chain Pressure Index, documents disruptions to supply chains since 1997. The gauge has historically moved around its average.

The jump in supply-chain pressures seen during the pandemic blew away past increases in the index, including one in 2011 when a tsunami whacked Japan’s production and a flood in Thailand hamstrung the globe’s ability to produce cars and electronics, according to Fed researchers.

“The spikes in the GSCPI associated with the aforementioned events pale in comparison to what has been observed since the COVID-19 pandemic began,” the group wrote.