Inflation Could Be a Victim of Escalating Superpower Politics, Strategists Warn

Inflation may not fall simply because central banks want it to — global geopolitical tensions could play a major role too, according to strategists from William Blair. In their analysis, economists Richard de Chazal and Louis Mukama point to recent events in Caracas and intensifying competition among major powers as signs that the world economy is entering a new phase where multipolarity, deglobalization and nearshoring become dominant trends. These forces, they argue, are likely to make supply chains more fragile and produce more frequent supply shocks, contributing to higher and more volatile inflation over time. The strategists say companies may increasingly hold larger inventories to guard against disruptions, driving costs up. While current oil market developments could temporarily ease energy prices, it’s unclear how long that will last, especially given production costs above $60 per barrel. They also suggest that U.S. fiscal policy under the Trump administration is increasingly shaping economic outcomes, forcing the Federal Reserve to react to developments rather than lead monetary policy. As a result, markets may see continued volatility in stocks, bonds and gold. #inflation #geopolitics #supplychains #economicpolicy #SlimScan #GrowthStocks #CANSLIM