More consumer-oriented companies are warning that supply cuts and logistical problems could force them to raise prices.
Limited stocks of materials such as semiconductors, steel, lumber and cotton are reflected in survey data, Bloomberg writes. At the same time, producers in Europe and the United States this week have noted higher prices for raw materials, trying to replenish their own stocks in order to keep up with growing consumer demand.
In such conditions, the question of whether the coming inflation will be a temporary phenomenon is becoming more and more popular. Many economists and central bankers, including the US Federal Reserve, argue that price increases are temporary and will be constrained by factors such as unemployment and the pandemic. Investors, in turn, are skeptical, especially since companies like Nestle and Colgate-Palmolive have already announced that they are forced to raise prices for their products.
US Treasury Secretary Janet Yellen said yesterday that interest rates are likely to rise. Following this announcement, which led to a panic in the stock market, Yellen was quick to assure that she is not forecasting or recommending increases.
Meanwhile, the Bloomberg Commodity Spot Index, which tracks 23 commodities, climbed to its highest level in nearly a decade. According to JPMorgan Chase & Co. and IHS Markit, pushing global manufacturing prices to their highest levels since 2009 and US producer prices to levels not seen since 2008. Analysts at JPMorgan also believe that imported non-food and energy prices in the largest countries rose nearly 4% in the first quarter, the highest in three years.
“Risk is clearly on the upside in the current environment”, – said John Mathersall, director of research for pricing and procurement at IHS Markit.
“The sharp rise in commodity prices over the past year now guarantees higher commodity price inflation this summer”.