WHAT YOU NEED TO KNOW:
- Prices continue to increase at a record pace that was last seen in December 1990.
- President Joe Biden pledged that his administration’s priority will be to reverse this trend.
- The president added that the nearly $2 trillion Build Back Better plan will help the nation’s economy recover.
As price increases see a record high, President Joe Biden pledged that his administration will tackle the inflation head-on.
Biden stated, “Inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me.”
The president added that the nearly $2 trillion Build Back Better plan will help support the U.S. economy’s recovery.
According to the Bureau of Labor Statistics, prices rose 6.2% on a year-over-year basis in October. That kind of rapid increase was last seen in December 1990.
The Consumer Price Index (CPI) data showed that prices rose 0.9% on a month-over-month basis, compounded by the 6.1% increase in gasoline prices between September and October and a 12.3% fuel oil price increase.
To address the prices in this sector, Biden said that he directed the National Economic Council to “further reduce” costs and the Federal Trade Commission to “strike back at any market manipulation or price gouging.”
Other major expenditures have risen, however. Food prices rose by 1.0% while shelter costs increased by 0.5%.
Policymakers at the nation’s central bank, the Federal Reserve, had initially described the rising prices as “transitory” and attributable to COVID-related bottlenecks in the global supply chain.
Chip shortages had caused a surge in vehicle prices. But while there were months that showed decreasing prices and easing price pressures, prices started increasing again in October.
The Fed is now warning that high prices could last through the start of next year.
The Fed will be slowing the pace of its bond purchases this month to start paring back its stimulative policies. But while it has placed near-term borrowing costs at near-zero to support the pandemic recovery, the central bank has not yet shown any intention to raise interest rates.
Biden had stated, “I want to reemphasize my commitment to the independence of the Federal Reserve to monitor inflation, and take steps necessary to combat it.”