Insight - Don’t count soaring freight costs among inflation worries

TheStar Thu, Jul 22, 2021 08:40am - 2 years View Original


Businesses must either absorb the higher freight rates or pass them on to customers, and in some cases inventory might not be available at all.

SOARING freight costs have been one of the key pain points in the United States economic recovery this year, contributing to inventory shortages and higher prices.

It’s still unclear to what extent and how quickly these higher prices might ease as the recovery progresses. Regardless, they should be seen as what they are: a shock that’s having a cooling effect on economic activity, rather than a long-term driver of inflation.

We’ve been here before, in the 2000’s with high oil prices and a few years ago with tariffs. If freight costs do come down over the coming months, they’ll work as a kind of economic stimulus that would help offset any tightening of monetary policy the Federal Reserve (Fed) might do over that time.

...

Full Article on TheStar

The content is a snapshot from Publisher. Refer to the original content for accurate info. Contact us for any changes.






Related Stocks

FM 0.600

Comments

Login to comment.