• Local Produce
  • Buy Local
  • Local Seafood
  • Local Food
  • Local Music
  • Local Art
  • Local Churches

CAPE CHARLES MIRROR

Reflections on Cape Charles and the Eastern Shore

  • Local Services
  • Local Rentals
  • Local Employment
  • News
  • Opinion
  • Classifieds
  • Pets
  • Contact Us
  • Rant and Rave
  • Asses&Villains

Inflation will hurt way more than Covid

November 14, 2021 by Leave a Comment

Goldman Sachs analysis says that inflation will eclipse new COVID-19 outbreaks as the primary threat to global economic growth. Sachs explained this week that the Federal Reserve will likely begin hiking interest rates as inflation in the United States continues:

Higher-than-expected US inflation recently prompted us to pull forward our forecast for Fed liftoff by a full year to July 2022. We now expect core PCE inflation to remain above 3% — and core CPI inflation above 4% — when the QE taper concludes, which would make a seamless move from tapering to rate hikes the path of least resistance. After liftoff, we see a second hike in November 2022 and two hikes per year after that.

The key to this gradual pace is a partial moderation in goods prices and in overall inflation, driven by a combination of slowing demand and rising supply. On the demand side, we expect spending on goods to moderate as US government income support normalizes and service activity rebounds. Although US real goods consumption remains nearly 10% above trend, this already represents a decline of 5% since the peak in March when households received stimulus checks, and the adjustment likely has further to go.

Since medical advancements will continue to slow COVID-19 spread, Goldman Sachs expects a reduction in consumer fear over the virus. Rising price levels may therefore replace COVID-19 as a primary bottleneck to economic recovery:

This means that the biggest risk to the global economy may no longer be a renewed downturn because of fresh virus outbreaks, but may now be higher inflation because of tight goods supplies and excessive wage pressure. Although we expect a significant part of the goods supply squeeze to abate over the next year, at present the stress on supply chains is substantial and inventories in semiconductors, durable goods, and energy markets are very low. In such an environment, even a moderate production outage resulting from covid outbreaks in China, an energy demand spike related to a cold winter, or other short-term disruptions could have sizable economic effects.

Filed Under: Bottom, News

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Search

Join the Conversation!

Send letters, opinion, goings on or photos to capecharlesmirror@gmail.com

Mirrors

Recent Comments

  • Paul Plante on Cape Charles Businesses Rock the Best of Virginia Readers Survey
  • bd on Does Cape Charles need a Cart Narc?
  • Stuart Bell on Asses&Villains: Roe vs. Wade Edition
  • Stuart Bell on Asses&Villains: Roe vs. Wade Edition
  • Christine Parks on Virginia to Receive More Than $20 Billion for Bridge Replacement Program, Appalachian Development Highway System
  • Doug Luther on Cape Charles Businesses Rock the Best of Virginia Readers Survey
  • Blue Hoss on Does Cape Charles need a Cart Narc?
  • DJ Stupid Birthday on Does Cape Charles need a Cart Narc?
  • Jacob on Asses&Villains: Baby Formula edition
  • Paul Plante on Asses&Villains: Baby Formula edition
  • Steve on Virginia to Receive More Than $20 Billion for Bridge Replacement Program, Appalachian Development Highway System
  • Paul Plante on Does Cape Charles need a Cart Narc?
  • Paul Plante on Asses&Villains: Baby Formula edition
  • Paul Plante on Asses&Villains: Roe vs. Wade Edition
  • Hank Mayer on Virginia to Receive More Than $20 Billion for Bridge Replacement Program, Appalachian Development Highway System
  • Brand on Does Cape Charles need a Cart Narc?
  • Daniel Burke on Does Cape Charles need a Cart Narc?
  • Jason on Does Cape Charles need a Cart Narc?
  • Brian Collins on Atlantic States Marine Fisheries Commission will monitor Rockfish every year
  • Bob on Does Cape Charles need a Cart Narc?

Trending Now

  • Does Cape Charles need a Cart Narc?
  • List Of Clinton Associates Who Allegedly Died Mysteriously Or Committed Suicide Before Testimony
  • Cape Charles Police Stats for April 2022
  • Central Park Concert Calendar 2022
  • Cape Charles Businesses Rock the Best of Virginia Readers Survey
  • Op-Ed: Compare George Orwell's 1984 to Society Today
  • Virginia to Receive More Than $20 Billion for Bridge Replacement Program, Appalachian Development Highway System
  • Letter: Removal of Tourist Cottages Northampton County Zoning Ordinance
  • Virginia's Recreational Fishing Regulations For Marine Waters
  • Join CBES for the Picnic at the Barn

Subscribe to CC Mirror via Email

Enter your email address to subscribe

Copyright © 2022 · News Pro Theme on Genesis Framework · WordPress · Log in