It’s Getting Worse! Biden’s Top Mistake As President

In comparison with the previous month, the consumer price index increased by 0.4 percent in March. As compared to a year ago, the headline index has increased by 3.5 percent.

In the month-to-month number, economists had predicted a 0.3 percent gain and, over the course of a year, 3.4 percent growth.

Excluding food and energy, core inflation increased by 0.4 percent in the month, which was in line with the previous month’s increase and more than the anticipated 0.3 percent. Core inflation is up 3.8% from a year earlier, mirroring the February rate and exceeding forecasts as well.

Many observers predicted that the January increase in the consumer price index was only a seasonal anomaly, and that inflation would soon begin to decline once more. That is no longer a tenable explanation following three months of hotter-than-expected inflation. Core inflation has increased at an annual pace of 4.6 percent throughout the past three months. According to Harvard economist Jason Furman, that is the greatest three-month annualized inflation for any time between August 1991 and 2020.

June 2022 marked the pinnacle of consumer inflation, which has subsequently declined as a result of record-high interest rate increases by the Federal Reserve and congressional restraint on the Biden administration’s spending due to concerns over abnormally high budget deficits. Untangling supply networks has been a significant factor in the deflation of product prices.

According to statements made by the Federal Reserve, it is seeking evidence to increase its confidence that inflation will decline to two percent. It is unlikely that the rate of price increases will slow down going forward, given the spike in inflation in February. Based on the facts, it is more probable that this summer, if not longer, will see rate cuts by Fed officials.

The market had priced in a 60% possibility of an interest rate reduction at the June meeting of the Federal Reserve prior to the data’s release on Wednesday.

The federal government has maintained extremely high budget deficits in spite of the expiration of the pandemic stimulus and the Joe Biden administration’s post-covid spending binge via the Inflation Reduction Act and¬†American Rescue Plan. Higher interest rates have probably had a significant negative impact on inflation due to this extremely broad fiscal policy.

Author: Blake Ambrose

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