Inflation, rate hikes, energy prices drove economy in 2022
Inflationary strains in 2022 compounded by one of the worst energy crises since the Arab oil embargo in the 1970s may be easing, though prevailing sentiment suggests the global economy is not yet out of the woods.
The year started with a bit of optimism as vaccines targeting the novel coronavirus that causes COVID-19 marked the end of social restrictions and the return to some semblance of normalcy. Contacts across the
For the 12-month period ending in
The global economy, along with the prevailing sense of global order, was upended further when Russian military forces invaded
"Commodity prices are being driven higher and risk further fueling inflation, which hits the poor the hardest," they said in a
An early March research note from Swiss investment firm
Sanctions targeting Russian products had yet to materialize -- by December, the
"I think it means less supply," he said amid growing concerns that crude oil prices will return to the
Brent hit
"To the companies running gas stations and setting those prices at the pump, this is a time of war,"
"While many choose to point fingers at one political party or the next, the reality is that the global economy is highly unstable, and the
For the European economies, however, it was the price of natural gas that was a major concern.
By the end of the year, European gas storage levels were reasonably secure and vessels laden with liquified natural gas -- sourced largely from
The European economy relied on
The energy crisis meant that inflation for the economies that use the euro currency flirted with 10% for the 12-month period ending in July, strained in no small part by shocks in the commodity markets. Central bank policy makers on both sides of the
Navigating a troubled path since leaving the
And it was no less ominous in
"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," Federal Reserve Chair
By July, analysts at
The outlook, at least for the
Also a factor in cooling inflation was the slow untangling of supply chain problems, which were aided when Biden signed the CHIPS and Science Act, policy designed to increase domestic production of semiconductor chips to ease
"We still have work to do, but we're on track," Biden said of the
But then came a surprise decision from the
"We continue to believe OPEC+ has a strong desire to defend oil prices above
Brent crude oil started September at around
Fed Chair Powell, however, wasn't done, implementing two more 75-basis-point hikes in September and November.
"We need to act now forthrightly, strongly as we've been doing and we need to keep at it until the job is done," he said during remarks in September.
Meanwhile, the war in
Trumpism, however, had a poor run in the November election.
But that did little to resolve global economic challenges. Most forecasts were still pointing to
Falling gas prices and upsets at the polls, meanwhile, did little to improve the mood for consumers. While hiring remained strong, wages weren't keeping up with inflation and concerns about a possible recession were spoiling the mood for American consumers and businesses.
"The outlook is troubling and unsettling," one respondent in the manufacturing sector told the
Approaching the new year and there are few signs that market conditions, geopolitical pressures or general malaise will improve anytime soon. While global forecasts vary, it would be tough to find an analyst pointing to a lower-for-longer future for commodities.
"I think oil prices get back on an upward track," Flynn with
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