Chronic. He moved! The equinox tides did their job and lifted the hull of theEver Given, this 200,000-ton clot that blocked the main artery of trade between Asia and Europe. All hopes are therefore permitted. But in the meantime, hundreds of ships stranded on both sides of the Suez Canal are causing an unexpected slowdown in trade. Here we lack oil, there electronics, steel and even Romanian sheep. By the effect of a malignant sand wind in the desert of Egypt, the world has shifted from fear of pandemics to fear of shortages, awakening the long-buried specter of inflation.
Suez’s discomfort is but the expression of a deeper affection. Even before the Covid-19 crisis was a thing of the past, prices began to rise. As often, the phenomenon first appeared in the United States. And where we did not expect it, on the side of electronic chips for cars. Gradually, factories came to a standstill. On Friday March 26, the manufacturer Stellantis (Fiat-PSA) again announced the suspension of production in five of its factories in North America.
Fire in the powders
The stronger-than-expected recovery in consumption across the Atlantic has ignited the powder. Before the vaccines even worked, consumers hit the shops again. Logistics chains, seized since 2020, have not followed. Traders and manufacturers are replenishing their stocks, demand is racing and the shortage is setting in. The Biden stimulus package will add a little more adrenaline to it.
As a result, prices are going up everywhere, from copper ore to the local espresso, including the building. The Federal Reserve has raised its inflation forecast. From 1.4% currently, they should climb to 2.2% at the end of the year, much more than initially expected (1.8%). Something to worry about investors, who fear that this sudden improvement, if it is good for the economy, will also cause a rise in interest rates. It would then spell the end of the blessed era of free debt and stock market euphoria. According to the monthly Bank of America study, inflation became the number one concern of investors in March, ahead of the pandemic or the trade war. A first for more than a decade. Fleeting excitement of a convalescent world? This will be the big question of 2021.
