NY Fed says April supply chain pressures highest since July 2022
The NY Fed's Global Supply Chain Pressures index rose to 1.82 in April, the highest level since July 2022, due to disruptions from the Middle East conflict. The increase has raised concerns about inflation, with economists warning of further price pressures if the disruptions continue.
The Federal Reserve Bank of New York's Global Supply Chain Pressures index surged to 1.82 in April, up from 0.68 in March. This marks the highest level since July 2022, when the index was at 1.86. The New York Fed did not provide an explanation for the factors driving the increase. The conflict in the Middle East, triggered by President Donald Trump's attack on Iran, has severely disrupted global trade, particularly through the Strait of Hormuz, and driven up energy prices. New York Fed President John Williams noted that supply chain pressures are 'boiling' and echoing the severe shortages seen in 2021. Economists warn that if the disruptions continue, inflation pressures will worsen, potentially leading to steady interest rates or even a rate hike. Underlying inflation is expected to be just under 3% in the fourth quarter, with 50 basis points attributed to tariffs, oil, and supply chain disruptions.
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