The number of high-profile supply bottlenecks appears to be rising. Outages at Chinese manufacturing hubs are threating to further disrupt global supply chains, including for semiconductors.
Brent crude topped $80/barrel for the first time in three years on Tuesday, as China’s clean energy drive (shift away from coal) and surging gas prices pushed up oil.
The confluence of supply shocks hitting the global economy has changed the narrative in markets. There may be a more structural element to rising commodity prices.
‘Inflation is transitory’ is being challenged.
Ultimately, the expansion in renewables will be deflationary. But the short- to medium-term costs have perhaps not been fully priced in by financial markets.
