Here is a surprise. Joe Biden really is a record-breaking president. But wait, not in a good way, for several reasons.
After his embarrassing appearance on Jimmy Kimmel this last week, which saw the president brag about his economic prowess, as well as perhaps even more embarrassing, his speeches in Los Angeles this past week at the Summit of the America, new data has revealed that inflation rose to yet another all-time high last month.
The Labor Department’s report on Friday showed inflation had risen to 8.6% in May, the highest level since 1981, beating Biden’s previous top score of 8.5% he set in March.
Soaring prices for food, fuel and energy contributed to the surge last month, which experts say indicates we haven’t yet seen the peak of this crisis, despite Biden’s promises. Core inflation, not including the hot-price products like food and fuel, matched the rates seen in the previous month at the steady rate of 0.6%.
This is in direct contrast with Biden’s promises that inflation had already seen a peak and would stabilize before declining.
“There is no denying that when you look at this report, it looks like inflationary pressures remain elevated and there appears to be no immediate relief in sight,” said Pooja Sriram, an economist at Barclays Bank, adding “That it was hard to say if inflation had reached a peak, and that “one swing” in energy prices could cause a further surge.”
For average Americans, the cost of living has risen through the roof, and many are now struggling to afford every day essentials. Gas prices soared to an eye-watering $4.37 per gallon in May, and the cost of a gallon of regular gas in the U.S. is $5.01 today (Sunday).
As the invasion of Ukraine by Russia, the conflict has significantly increased the cost of grains, and food prices have also sky-rocketed, with groceries up 11.9% in May.China’s prolonged and severe Covid restrictions also caused a disruption to the supply chain and a further hike in prices.
The strain for many families is crippling, with 90% of families with children now saying they are finding it harder to make ends meet, while 60% of the Parents Together Action poll said they are struggling to provide basic essentials.
Taming the inflation beast will prove a tricky task for the Federal Reserve. It will, in all likelihood, raise interest rates to make borrowing money more expensive by a significant amount to combat high inflation, but this will be a tricky balance for the central bank between taming inflation and spurring a recession.
Experts suggest the Fed will further increase its interest rate policy by half a percentage point in July in addition to it .75 basis point increase since March. This is designed to slow the economy to allowing a cooling-off period, stem consumer demand and lower inflation levels.
New York’s Citigroup economist, Veronica Clark said, “Continued strong monthly inflation could suggest the Fed more explicitly guide towards policy rates continuing to rise by .50 basis points or more until realized inflation data is convincingly slowing.”
As the mid-terms loom for Democrats, voters will certainly have money on their minds. Biden continues to make promises he’s unable to keep and economic predictions with about as much basis in reality as some of his speeches, it seems likely the Dems will take a hit come election day.
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