Inflation Threat May Be Boosted by Changes in Globalization, Demographics and E-Commerce

For the past few decades, the Federal Reserve has succeeded in keeping inflation low—perhaps too low. It had an assist: Shifts in the global economy, including globalization, demographics and the rise of e-commerce, helped keep prices in check.

Some economists say these so-called secular forces have begun to reverse in ways that the pandemic has intensified.

“The factors that were…playing a significant role in that low-inflation environment last cycle are beginning to fade,” said Sarah House, director and senior economist at Wells Fargo.

That could have important implications for the...