

Inflation: A Supply Phenomenon
Constrained Supply. The global economy is reopening, with the U.S. leading the way with its vaccine roll-out. While the Delta variant of COVID-19 gives pause, vaccination rates, prior exposure, and focused mediation methods will limit the impact. The challenge for financial markets is that unprecedented monetary and fiscal stimulus delivered high valuations in most asset classes, while supply demand imbalance delivers higher inflation. The latter is temporary, while the forme