Fixed Income Outlook - November 2021

It has become clear that US and global inflation pressures are more than simply transitory. Supply-side disruptions that were supposed to be fleeting proved to be more persistent as the pandemic affected both consumption and production patterns. The rotation of consumer demand from services to goods, alongside massive fiscal intervention to support incomes and spending, led to a drawdown in goods inventories, straining supply chains. In services, meanwhile, worker shortages will likely take several months to decline given the hesitation among many to return to work while Covid-19 risks remain.