The return to normalcy in the global supply chain, very disrupted by the pandemic and suffering from delays and rising prices, could take a year to resolve, estimated Thursday the President of the American Central Bank (Fed) Jerome Powell .
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“We think the supply chain will adapt, and become more efficient, it could take a year, but it will happen”, assured Jerome Powell during a virtual conversation organized on the sidelines of the spring meetings of the IMF and the World Bank. Global maritime transport has indeed been greatly disrupted since the end of 2020 by the sharp increase in the purchase of goods, with consumers spending almost nothing for a year on restaurants, trips, theaters or other services. However, these goods are very often manufactured in Asia, causing congestion in ports and a shortage of containers to transport these objects. As a result, delivery prices are soaring, which will lead to higher prices, fueling speculation about high inflation in the coming months in the United States.
The Fed chairman, however, recalled, as he has done on numerous occasions, that this price increase should only be temporary. “Many advanced economies around the world, at least over the past decade, have not been able to achieve 2% inflation (Fed target), some actually struggling against disinflation”, he recalled. With the reopening of the economy, “There may be a surge in demand, there may be bottlenecks”, he agreed, but “We think this effect will be temporary”.
2.25% expected inflation
The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva, during the same discussion, indicated that the institution’s forecasts were in line with those of the Fed: “We are forecasting 2.25% inflation in the United States” in 2022, she said. The Fed expects 2.4% in 2021, then 2.0% in 2022 and 2.1% in 2023. The minutes of its last monetary meeting, published on Wednesday, however showed divergences on the subject. among its members.
Jerome Powell also kicked in touch when asked about his succession, ensuring not to think about it, but to pass “A lot of time to think about how to do our job best and that’s enough”. His four-year term expires in February 2022.
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