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Opinion
Karl W. Smith

Supply-Chain Disruption? More Like Supply-Chain Overload

The stresses on the global economy are caused mainly by an increase in demand, especially from the U.S.

Plenty of supply.

Plenty of supply.

Photographer: Spencer Platt/Getty Images North America

The first step toward understanding the Great Supply-Chain Disruption of 2021 is to recognize that the phrase itself is not quite accurate. Supply chains are not disrupted so much as overloaded, and the effects are more national than global.

This understanding has implications not only for U.S. consumers but also for the Federal Reserve. It means that inflation is transitory and is unlikely to spread to the rest of the developed world. So the Fed and other banks shouldn’t raise interest rates in the near future — and consumers needn’t worry that products such as Chinese-made toys will always be so expensive.