Supply chain pressures cooled again in May, according to New York Fed data, in a development that further dampened what has been one of the key factors contributing to the rise in inflationary pressures around the world.
The New York Fed said on Tuesday that its latest global supply chain pressure index stood at -1.71, compared to the revised index of -1.35 for April. The report indicates that supply chain pressures are below average in all regions of the world included in the index.
The bank linked the reduction in pressure in May to declining contributions from Britain’s arrears and Taiwan’s useful times. Delivery times and backorders in the Eurozone, however, put upward pressure on the index.
After peaking at 4.31 in December 2021, the New York Fed index has steadily declined as supply chain issues brought about by the coronavirus pandemic have been resolved. The index dipped into negative territory in February, a sign that supply chain pressures had largely subsided, and it has been falling ever since.
Supply chain pressures have been a key driver of rising inflation, prompting central banks like the Federal Reserve to make aggressive rate hikes to bring price pressures down acceptable.
Inflationary pressures have eased enough in recent months to allow the Fed to pause rate hikes at its meeting next week, although the pause will not end the tightening campaign as the factors of demand continue to keep underlying inflationary pressures much higher than central bankers would like to see.
2023-06-06 15:14:01
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