Shortages threatening to stifle the recovery

The list of anecdotal reports of labour and product shortages has grown ever longer in the past week and pose two major risks to the economy. First, that the near-term recovery will be slower than we expect. Second, that if they persist for longer than we suspect then inflation might not drop back to 2.0% in late-2022. These dual risks of slower GDP growth and higher inflation sound like a gentle whisper of stagflation.