U.S. officials announced today that inflation rose 5.4% annually in June, the most since August 2008, showing that consumer prices are climbing and challenging the Federal Reserve Board’s (Fed) claim that high prices will fade in the coming months.
As the 2019 coronavirus disease (COVID-19) vaccine is widely administered, the U.S., the world’s largest economy, has been able to loosen its epidemic control, and the U.S. public has resumed spending and traveling again, but is also facing rising prices, such as higher costs for used cars, gasoline, hotels and airline tickets.
The trend of rising prices may undermine the support of Biden’s tentative economic plan, which includes large-scale employment and infrastructure programs.
The U.S. Department of Labor said the Consumer Price Index (CPI) rose 5.4 percent (not seasonally adjusted) in the year to June, the highest rate since August 2008.
Prices rose sharply in June, so that the Federal Reserve Board Chairman Jerry Powell (Jerome Powell) pressure multiplied, he will face congressmen questioning tomorrow and the next two days.
Powell repeatedly insisted that the biggest factors driving price increases will disappear, and inflation will come down.
But economists are beginning to doubt Bauer’s views.
Grant Thornton chief economist Diane Swonk said, “Price increases are driven primarily by the COVID-19 outbreak, but have surprised many Federal Reserve officials who expected the rise in inflation to be a short-lived phenomenon.”
She warned that the possibility of falling inflation is fading.