US supply-chain stress is rising, but is still well short of 2022 levels
Supply-chain stress is rising, driven by air freight costs and geopolitical tensions.
Supply-chain stress is on the rise, reaching its highest level since 2022, primarily driven by a significant increase in air freight rates. While current stress levels remain below those of 2022, the implications for prices, delivery times, and order backlogs warrant close monitoring.
The surge in air freight costs, influenced by rising jet fuel prices, has contributed to broader supply-chain pressures. This trend is echoed globally, with the New York Federal Reserve’s index also indicating heightened supply-chain stress. Additionally, the Baltic dry bulk shipping index has seen increases due to higher bunker fuel costs, although container shipping rates have remained relatively stable.
Concerns about critical supply shortages, particularly in semiconductors, have emerged due to geopolitical tensions affecting natural gas and helium supplies. These factors are expected to exert upward pressure on core inflation, with projections indicating an average of 3% core PCE inflation in 2026 as supply-chain disruptions persist.
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