Speech

Navigating Supply Shocks

Abstract: Over the last several years, the U.S. economy has faced wave after wave of supply shocks. Conventional central bank wisdom says the Fed should look past supply shocks. This approach of looking through supply shocks has worked well for a generation thanks to what economists call “anchored long-term inflation expectations.” I’ve been asking myself whether we’ve entered an era where supply shocks will become more frequent. Does the Fed have the luxury of riding out all the waves that come our way? For me, it comes down to how much businesses, consumers and inflation expectations can take.

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Speech

Publication Date: 2026-05-21