Supply chain issues have accounted for about half of the surge in U.S. inflation, exacerbated by the conflict in Ukraine, according to a June 21 report from the Federal Reserve Bank of San Francisco.
High consumer demand currently makes up a third of the increase.
“These results showing that factors other than demand account for about two-thirds of recent elevated inflation highlight some risks for the economy,” wrote Adam Hale Shapiro, Vice President in the Economic Research Department of the Federal Reserve Bank of San Francisco.
“Because supply shocks raise prices and suppress economic activity, the prevalence of supply-related factors raises the risk of entering a period of low growth and elevated inflation levels.”…