The inflation progress has stalled, and it is not just a US phenomenon. It is spread to Europe and with freight rates rapidly on the rise, we are likely no longer getting any help from goods inflation in coming quarters. Can we cancel the global cutting cycle or where does it leave us?

Inflation surprises are rising again, especially in the UK and the US, but also in Germany now. Outside of Scandinavia, it is hard to find a region with “pleasant” inflation surprises over the past months and with the stuff brewing in supply chains, freight rates, shipping, and the likes, we are no longer getting any tailwinds from goods prices. Without a clear disinflation in goods, we wouldn’t even be discussing a cutting cycle from big central banks at this stage, and goods disinflation is no longer a thing as of May.

Chart 1: Inflation surprises are getting hotter