text: Good morning. Here’s your Early Warning for Friday, 26 November 2021.TODAY’S BRIEFING:In Focus: Supply chain, stagflation to plague Powell’s second termEconomic Warning INTSUMInFocus: Supply chain, stagflation to plague Powell’s second termThe Biden administration announced this week that current Federal Reserve chairman Jay Powell is being nominated to stay on for a second term, which starts in February 2022. Former Fed economist Claudia Sahm painted a bleak picture for Powell’s second term policy options. Next year “without question, is going to be one of the hardest years that the Fed has had to navigate. They have a very complicated task ahead of them,” she warned. To reiterate months of previous analysis in this report, the Fed will be hiking interest rates to combat inflation, which will also slow economic growth. As a reminder, 10 of the last 13 rate hike cycles have ended in recession, including a number of premature and unexpected recessions. This is the Fed’s big risk going into these rate hikes.Supply chain issues will continue to be inflationary as not enough goods are being produced to meet demand. Supply shortages started to trend lower in June, but constraints remain critically impeded.In a report released by the United Nations Conference on Trade and Development (UNCTAD), prices of goods experiencing these pressures the most, including electronics, clothes, and furniture, could still increase by more than 10% globally. Additionally, UNCTAD warns that price increases from higher shipping costs could contribute to 1.5% of further pressures. Because of shipping prices, some goods will be unavailable altogether. Manufacturers can’t export those goods at lower prices and are raising finished product prices to turn a profit. U.S. e-commerce retail sales continue near all-time highs. In Q1 of 2020, directly previous to the onset of the pandemic, e-commerce sales were $154.58 billion. In Q3 of 2021, e-commerce sales were at almost $215 billion, with all-time highs measuring $222 billion during Q2 of 2021. With Christmas on the horizon, and Black Friday happening today, Q4 data could break new all-time highs.