In mid-2021 there was a clear divergence between the relaxed dovish rhetoric with which the Fed started to deal with the problem of inflation, adopting a posture of letting normal planning run for the regularization of its monetary policy, despite the data indicating that the increase in the cost of living would rise substantially and in no way transitory. First of all, because two fundamental components of the current economy would not have their constraints resolved in the short term.
I am referring to semi-conductors and the lack of manpower, not including the issue of energy because it depends more on the will of OPEC+ than on the fundamentals of the markets. And if in the labour market, the technological shock of the COVID pandemic led to a mismatch between the qualification of the workforce and market demand, the same shock pushed the demand for chips to levels above the usual. First of all, because at the same time it is a gigantic change in the mobility paradigm is taking place, with its electrification but also with the significant increase in the technological factor in cars.
Now, none of these points are easily resolved, let alone quickly resolved, which should lead FED members to be more proactive in preventing an unusual escalation of inflation, resulting from the scarcity of both resources I mentioned. Now the US central bank is in a race against time, in a flight forward, clearly behind the curve of events at the beginning of the year, which forced a rapid change in its actions, it remains to be seen whether the shock of its actions to contain runaway inflation will or will not trigger an economic recession.
