China Covid Lockdowns Threaten To Fuel U.S. Inflation As Economic Pessimism Grows

China Covid Lockdowns Threaten To Fuel U.S. Inflation As Economic Pessimism Grows

Share to Linkedin As rising cases in Shanghai threaten further lockdowns in the region, experts are warning China's pandemic crackdown measures this spring could be the latest headwind for the U. S. economy—fueling rapid inflation that the Federal Reserve is trying to fight by easing its monetary stimulus measures. A traffic police officer is on duty after Shanghai imposed a citywide lockdown to halt the spread of ... [+] Covid-19. The effects of China's stay-at-home mandates on the U. S. economy should "become apparent" in government data released next month, Bank of America's Aditya Bhave said in a Friday morning note to clients, noting the U. S. will primarily feel the impact through supply-chain disruptions and resulting inflation. Though he doesn't believe the lockdowns will spur a new peak in yearly inflation, Bhave does expect a "short burst of upward pressure" on the prices of goods that could slow the rate at which overall prices cool. "The China lockdowns are yet another headache for the Fed in its fight against inflation," the economist says of the potential implications, noting any "sustained impact" on inflation should be clear by September, when the Fed is slated to decide whether it will raise