Global markets overview : asset research team. may 2021
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<subfield code="a">There are many drivers of current high US inflation: i) Base effects from low inflation one year ago; ii) aggressive monetary and fiscal easing; iii) a narrowing of spare economic capacity; iv) rising energy and industrial metals prices; v) an unwinding of pent-up consumer savings; and vi) supply chain squeezes due to Covid-19 restrictions. We believe a number of these forces, which are driving inflation over the short-term, are most-likely to prove transient and are likely to abate over 2022. However, we expect high inflation volatility in different sectors as the US economy moves to its post-pandemic new normal. </subfield>
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