As the United States economy recovers from the pandemic it comes as no surprise that the recovery is accompanied by high levels of inflation, the fastest inflation the US has seen in decades.Inflation has gotten to the point where it is starting to impact citizens who are seeing prices rise as the holiday season rolls around and while income is also on the rise it is not keeping up with inflation.The administration is confident that this inflation will be "short-lived" as the administration looks to expand the labor market, increase vaccination numbers and invest in American manufacturing all "while waiting for the supply-chain labor-market disruptions to ease".
This all sounds well and good, but the real question which people do not seem to have the answer for is how long "short-lived" will last?
Link: https://www.aljazeera.com/economy/2021/12/9/bidens-commerce-chief-confident-inflation-will-be-short-lived
2 comments:
If the main objective for the government is to combat the inflation issue, the Fed does have some effective tools that they can use. As of November 3rd, the fed funds target rate is 0.25%. This means that it still leaves a lot of room for the Fed to raise in order to decrease the money supply in the country right now. The next FOMC meeting and decision on short-term interest rates will be soon (Dec. 15th), and it would be interesting to see the result.
I absolutely see the problem of inflation in our everyday lives. About once a week when I go to the fuel pump it gets too close to home. The main concern I have at the moment is that there doesn't seem to be any action take by the administration to combat the rising prices. All that I have seen in response has been claims that the inflation is a normal response after inflation with no actual response.
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