Commentary
At the end of February 2023, the price of oil (WTI and Brent), Henry Hub and ICE natural gas, aluminum, copper, steel, corn, and wheat, and the Baltic Dry Index are below their February 2022 levels.
The supply chain index and the global supply and demand balance, published by Morgan Stanley, have declined to September 2022 levels.
However, the latest inflation readings are hugely concerning. Considering the previously mentioned prices of commodities and freights, if inflation was a “cost-push” phenomenon it would have collapsed to 2 percent levels already. However, both headline and core inflation measures, from the consumer price index (CPI) to personal consumer expenditure (PCE) prices, show extremely elevated levels and rising core inflationary pressures….