By Michael S. Derby
NEW YORK (Reuters) - Supply chain pressures cooled again in May, New York Fed data showed, in a development that further eased what had been one of the key factors that had helped drive surging inflation pressures around the work.
The New York Fed said on Tuesday that its latest Global Supply Chain Pressure Index stood at -1.71, from the revised -1.35 for April. The report said supply chain pressures were below average in all regions of the world considered in the index.
The bank tied reduced pressure in May to diminished contributions from Great Britain backlogs and Taiwan delivery times. Euro area delivery times and backlogs put upward pressure on the index, however.
After peaking in December 2021 at a reading of 4.31, the New York Fed index has been steadily retreating as supply chain kinks generated by the coronavirus pandemic have gotten worked out. The index tipped into negative territory in February in a sign supply chain pressures had largely resolved themselves and have moved steadily lower since that point.
Supply chain pressures had been a key factor in pushing up inflation, which in turn drove central banks like the Federal Reserve toward aggressive rate increases to bring price pressures back in line.
Inflation pressures have eased enough over recent months that it's opened the door to the Fed pausing on rate rises at its policy meeting next week, although that pause may not bring the tightening campaign to a close as demand factors continue to keep underlying inflation pressures much higher than central bankers would like to see.