Uneven vaccination rates are creating a new economic divide

IN THE 1970S the fortunes of the world economy, in all its unfathomable complexity, seemed to turn on one product: oil. Exported by a narrow clique of countries, this vital input was hostage to ferocious political forces. Today the world’s economic prospects similarly depend on another all-important input, vaccines, which are also narrowly produced, delicately political—and unevenly distributed. Widespread vaccination is helping America to boom, pushing core inflation to its highest rate since 1992. But delays in buying, making and deploying shots have left much of the world vulnerable to new virus outbreaks and economic setbacks.On June 16th America’s Federal Reserve raised its forecast for growth, inflation and interest rates, noting the country’s vaccine progress. The median Fed official now expects two rate hikes in 2023. The change of tone was enough to increase bond yields both in America and in economies on the other side of the vaccine divide.