Economy experts are predicting trouble for President Biden as the nation draws closer to the November general election, leaving little time for his administration to fix the stubbornly high inflation plaguing Americans.
Inflation currently sits at 3.3% year over year, according to Department of Labor statistics. Although down from a near-record high of 9.1% in June 2022, it’s still higher than at any point in the last decade prior to Biden taking office.
The U.S. Federal Reserve announced Wednesday it would maintain the federal funds rate range at 5.25% to 5.5%, where rates have held steady since last July, an expected decision considering inflation rose less than predicted for the 12 months ending in May and the core Consumer Price Index rose a better than expected 3.4%.
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Former President Donald Trump, Federal Reserve Chairman Jerome Powell and President Joe Biden. (Getty Images)
Fed Chair Jerome Powell said that the report builds confidence that inflation is moving toward the 2% target but said more evidence is needed before the central bank begins easing policy.
Economist Peter Morici conceded the report was “certainly good news” for Biden, but said “prices are still up, and it’s only one report.” He also pointed to factors that influenced the report as not being pocket book issues for most Americans.
“[The report] was driven largely by energy prices falling. In the services sector, inflation is still very robust … Housing and the cost of shelter are rising 5% per year,” he said, adding that energy prices are subject to fluctuation and could look very different in a month.
“The underlying sources of inflation that trouble the Fed are still present. The Fed will not be able to cut interest rates a lot this year if at all. Even if it does, it will come too late to give much help to Joe Biden.”
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