An element of inflation

The chief economist of American Farm Bureau says there’s an element of inflation associated with the high costs related to supply chain backups.

Roger Cryan tells Brownfield that’s because policy makers reacted to the pandemic recession by growing the money supply.

“A lot of money was spread around the economy that increased the demand for the things that are now kind of clogging up the supply chain. The Federal Reserve Bank tried to stimulate the economy by printing money. They’ve also monetized some of the debt from the fiscal stimulus last year so now those turkeys are coming home to roost.”

Cryan says the pandemic recession is different than other recessions and the economy might have been over-stimulated, increasing the demand for products. He says there are signs the Fed is reversing some of that but it will take time.

Brownfield interviewed Cryan at the 2021 National Association of Farm Broadcasting convention.

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