Customers absorbing higher input costs and expectations of supply chain strain lasting well into 2022 were the dominant themes at a joint conference hosted by the South African Reserve Bank and the Bank for International Settlements (BIS).
One of the speakers at the event was Jerome Powell, chairperson of the US Federal Reserve.
In its latest Monday assessment of the previous week, the Bureau for Economic Research (BER) reports that Powell sounded less confident than before on the outlook for US inflation.
Powell said that while the current inflationary pressures were still expected to be transitory, they were persisting for longer than previously predicted.
“On that note, global consumer-goods groups Unilever and Procter & Gamble said last week that they had been able to pass on higher input costs to their customers and, to offset higher energy and other costs, further price increases are on the cards.”
Furthermore, the Fed chair also said that he was now of the view that supply-side bottlenecks could last “long into 2022”.
Bottlenecking pressures were also highlighted as a serious concern by Agustin Carstens, BIS general manager.
He said that while policymakers had done well to deal with the Covid-19 demand shock, more work needed to be done on how to manage severe supply shocks.
