You might be seeing the headline about the place that the US is exporting inflation ... and that the Federal Reserve hiking rates is making it worse.

These come from a piece posted by Bloomberg (gated). The long story short is:

  • During the pandemic, people all over the world bought more goods (TVs, laptops, exercise bikes, for example) and fewer services (eg. dining out)
  • This shift was significantly bigger in the US than in other rich countries
  • Since these goods are traded globally—with supplies constrained by Covid-19—US demand pushed up prices in other countries, too.

And, bingo, the US has been exporting inflation during its pandemic rebound.

Bloomberg go on with a second leg of the US exporting inflation:

  • rates in the US are rising much faster than in the euro zone and Japan, thus the USD dollar is soaring
  • the US switches to exporting inflation through another channel: the super-strong dollar


So, now you know.

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