Supply Shock
A supply shock is a sudden disruption that limits the availability of a commodity, often causing price spikes.
Quick Reference:
Sudden Supply Drop. Extreme Price Rise.
Expanded Explanation:
Supply shocks can be triggered by natural disasters, wars, strikes, or political instability. For example, a cyclone shutting down an Australian iron ore port or sanctions on oil exorts can sharply reduce supply. Demand often remains steady in the short term, causing prices to surge. Economists and investors track supply shocks closely, as they can inflluence infaltion and as a result monetary policy.