More chips required for global car production
The latest global economics dispatch (Easing chip scarcity) from First Boston offered this …
… More chip availability will drive global car output higher, albeit slowly. The auto production supply chain should absorb the initial rise in chips. First, auto manufacturers are likely to stockpile chips as long as they remain concerned about future supply. Second, excess car demand is encouraging producers to prioritize profitable premium models that use up to twice as many chips as basic models. The number of car-specific chips per vehicle produced has shot up by 74%, a development unlikely to reverse anytime soon (Figure 4).
Not sure where terminal level of FedFunds needs to be to impact a change here but best I reckon from what I’ve read so far, doesn’t seem to matter too much … markets TRADE here/now and it seems that Fed (retiring TRANSITORY) is to be celebrated.
Whether these changes all around are cyclical or structural remains to be seen…