Rising Inflation in America: Biden, Powell, and the Fed Struggle to Contain Prices
By Inflation in America is on the rise, causing worry among Americans and economists alike. Prices for energy, food, and shelter have all been increasing, with the Labor Department reporting that the Consumer Price Index (CPI), a broad measure of prices, rose 0.5% in January after a surprise decline of 0.1% in December. This marks a 6.4% jump in prices over the last year and a 5.6% increase in core CPI, which strips out food and energy, both of which are higher than expected.[0]
President Joe Biden has been trying to combat the issue with his policies and in his most recent State of the Union address; however, his efforts have not been successful. Tom Emmer, Republican from Minnesota and House Majority Whip[1], told Fox News Digital in an exclusive statement that “Just last week Joe Biden took a victory lap on the economy, but today’s report confirms he’s living in an alternate reality than Americans watching prices get higher by the day. This is Joe Biden’s economy.”[2]
The Federal Reserve is also trying to combat rising inflation. The central bank has been warning that it is poised to continue raising interest rates and risk a recession in an effort to bring inflation down.[3] However, some economists argue that the Fed does not need to be too concerned as incomes are simply recovering after getting hammered by inflation, and workers will stop pushing for as big raises once price spikes get more under control.[3]
Despite the efforts of both the Federal Reserve and President Biden, inflation is not going away any time soon.[4] With the unemployment rate so low, the Fed is worried that worker shortages will shift the trend, and so they have proposed raising rates higher, or keeping them at punishing levels for longer, until they see a softening in the labor market.[3] The tension between where the economy is and where it might be heading has been thrown in stark relief in recent days, as both Biden and Powell want to bring down inflation, but the Fed is likely to undermine one of the president’s biggest selling points heading into 2024.[3] American citizens and businesses will have to wait and see if their efforts to combat inflation will be successful.
0. “Biden can't stop lying about U.S. economy” Washington Times, 15 Feb. 2023, https://www.washingtontimes.com/news/2023/feb/15/biden-cant-stop-lying-about-us-economy
1. “Republicans blast Biden after latest inflation report, say president ‘living in an alternate reality'” Yahoo! Voices, 14 Feb. 2023, https://www.yahoo.com/now/republicans-blast-biden-latest-inflation-195305412.html
2. “BIDEN-FLATION” WIBC – Indianapolis News & Politics, 15 Feb. 2023, https://wibc.com/145887/biden-flation/
3. “While Biden celebrates a soft landing, the Fed’s Powell is worrying” Yahoo News, 13 Feb. 2023, https://news.yahoo.com/why-fed-powell-not-satisfied-093000972.html
4. “Republicans pounce on the weak inflation report — even offering an ode to egg prices” Yahoo News, 14 Feb. 2023, https://news.yahoo.com/republicans-pounce-on-the-weak-inflation-report–even-offering-an-ode-to-egg-prices-171311154.html
