Global Supply Chain Problem is Expected to Affect the Inflation

Due to increased attacks in the Red Sea, commercial ships passing through the Suez Canal have had to reroute. This has resulted in longer delivery times and increased costs. Approximately 10% of the world's trade passes through the Suez Canal. It is evident that a global supply chain crisis is imminent post-Covid.

To address this issue, a comparison has been made between the Global Supply Chain Pressure Index and the monthly changes in the Personal Consumption Expenditures Price Index (PCE), closely watched by the Federal Reserve, as of the beginning of 2022.

Based on the analysis, it is apparent that potential disruptions in the supply chain will have a limited impact on the inflation rate.