President's Message: Navigating Supply Shocks

Tom Barkin

Econ Focus, 2026, vol. 26, issue Q3, 1

Abstract: Over the last several years, the U.S. economy has faced wave after wave of supply shocks. Every time one wave recedes, we're hit with another: the COVID-19 pandemic, the Russian invasion of Ukraine, the collapse of Silicon Valley Bank, the tariff tumult, and most recently, the conflict in the Middle East. We've seen smaller ripples, too: a ship lodged in a major trade route, bird flu, factory fires, government shutdowns, ice storms, and more. These shocks affect the available supply of goods and services: too little energy, no chips for cars, tighter credit, not enough wheat. After the pandemic, we even saw supply challenges with labor. Typically, these shocks result in higher prices for a time and, in turn, a pullback in demand.

Keywords: inflation; monetary policy (search for similar items in EconPapers)
Date: 2026
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