The Pandemic Inflation Rollercoaster – Part Three

Michael LebowitzAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

This is part three of a four-part series. Here is Part One and here is Part Two.

Part one of this series led with a graph from Apollo Global Management implying that we are embarking on an inflation rollercoaster for the next 10 years, similar to the experience from 1965 to 1982. Parts one and two explained the causes and remedies for that prolonged inflation outbreak. Part three studies the recent pandemic inflation.

With the history lesson behind us, we move on to the recent inflation that was kicked off by the pandemic. This summary allows us to appreciate better the similarities and differences between now and 50 years ago.

Many governments, companies, and citizens reacted to the pandemic similarly. As a result, our inflation was further amplified by their actions.

We start with two graphs from the San Francisco Fed. The graphs quantify and attribute the sources of inflation to supply and demand side forces. The first graph shows the contributions year-over-year, while the second shows the monthly impacts.