Finance/Economics
Inflation and Lumber 101
In March 2020, the futures price of lumber fell to $303.40 a thousand board foot. Fourteen months later (May 2021), the future’s price hit a high of $1,607.50 a thousand board foot. The Fed notices when a material’s pricing goes up 5x in just over a year. It sent sounds of future interest rate increases- which as usual, caused a stock market decline. But shouldn’t someone have put together the fact that (a) lumber supply had decreased as mills shut down during covid and (b) demand increased because as we were sheltering in place (and stimulus money was flowing) home improvement and home construction soared? Temporary supply/demand inequality. Doesn’t the why behind the why say this time lumber has little to do with inflation.