Why supply-chain bottlenecks, price pressures may ease by year end – By Joy Wiltermuth (Marketwatch) / May 3 2021
Historical data shows supply bottlenecks, surging prices don’t last: Guggenheim Partners
Economists at Guggenheim Investments, like the Federal Reserve, think today’s skyrocketing lumber prices and shortages of essential parts, materials and labor likely won’t last long enough to spark runaway inflation.
“Supply chain disruptions are widespread in everything from semiconductors to lumber, contributing to fears that higher inflation is on the way,” wrote economists Brian Smedley and Matt Bush in a Monday note.
“These disruptions are being exacerbated by surging demand as the economy reopens and fiscal policy provides a strong tailwind for consumption,” they said.
But the economists also expect soaring prices for some key materials, including the lurch in lumber prices to more than $1,200 per 1,000 board feet from less than $200 a few months ago, to ease once capacity begins to pick up at sawmills, factories and manufacturers later this year.