Beige Book mentions of the word 'shortage' are at the highest level since the 1973 OPEC oil embargo
Even were it normal times, there’s the scandal of regional Fed presidents engaging in stock-market trading, which at least one outside group has said was possibly illegal. But it’s not normal times.
The big issue confronting the Fed is that demand has recovered more quickly than supply, creating all sorts of shortages as companies struggle to find the necessary workers and parts. “The more widespread shortages are, and the more that we talk about different products being in short supply, the more likely it is that a growing proportion of the consumer class is seeing their expectations for inflation de-anchor,” he says.
What could be happening is that investors are seeking a flight to quality, he says, though that doesn’t neatly fit with stock markets near records, and other assets surging. “You have to put the money somewhere,” he replies. The onshore subsidiary of China Evergrande said it has resolved the issue of its coming debt payment, as the fate of a dollar-denominated bond remains in doubt. A report said Evergrande could be restructured into three separate entities that would involve state ownership.
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