The price increase in the United States is the highest in three decades. Energy, in particular, increased by 30% in twelve months.
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Inflation reached the US its highest level in three decades in October. Consumer prices rose 6.2% year on year, unheard of since November 1990. “Inflation hits Americans to the portfolio, and reverse this trend is for me an absolute priority”, immediately regretted in a statement, the President Biden. He blamed the rise in energy prices, which rose 30% year over year while those in power were up 5.3%. But excluding food and energy, the index also soared 4.6 points year over year, against 4% in September. This is the highest level since August 1991
Inflation is beginning to settle in the United States, with an increase in higher annual price to 5% in five months. Biden, who has fought since he came to power, oil extraction and its impact on the environment may drive up energy prices, is now seeking to bring them down and solve multiple bottlenecks strangulation and shortages (freight, microprocessors, labor, energy) that impede recovery and increase the cost of money.
The president, who has to travel on Wednesday 10 November in Baltimore to tout his plan infrastructure – an old tunnel nineteenth th century, hindering rail traffic on the Amtrak east coast between Washington and Boston, has to be replaced – believes that the plan “will reduce these bottlenecks and making them more available and less expensive products.” He also called on Congress to vote its social plan called “Build Back Better”, which must supervise the prices of medicines and help families, which should by reducing him inflationary pressures.
The Fed decision squeezed between its two objectives
Especially Joe Biden calls for the Federal Reserve, vise grip between his two goals, maximizing employment and price stability. The spiral-inflation salary is not completely excluded since wages rose in October by 4.9% year on year with an unemployment rate dropped to 4.6% of the workforce. Clearly, the president of the United States has sided with a minimum orthodoxy: “I want to reaffirm my commitment to the independence of the Federal Reserve to monitor inflation and take steps to combat it” Biden wrote.
This overheating makes it more likely a higher cost of money by the Fed since 2022. His policy rates are set between zero and 0.25% since the beginning of the pandemic. This debate comes as Biden should say if he reappoints Jerome Powell, a moderate Republican, to chair the Federal Reserve, from 1 st February 2022, or prefers a personality more progressive, Democratic Lael Brainard.