High inflation, which has overshot the Fed’s 2 percent target, could imperil Biden’s economic agenda. Financial markets speculate a hefty 50-basis point interest rate hike from the Federal Reserve next month
U.S. consumer prices rose sharply in January, leading to a sharp annual inflation for 40 years, fueling speculative market speculation of a 50-point interest rate hike from the Federal Reserve next month.
The sharp rise in prices reported by the Department of Labor on Thursday is driven by rising rent, electricity and food costs, and could increase political pressure on President Joe Biden, whose reputation is declining amid concerns over rising living costs.
High inflation, exceeding the Fed’s target of 2 percent, could jeopardize Biden’s economic agenda. Biden, in a statement, acknowledged the hardships faced by American families, but noted that “there are signs that we will overcome this challenge”. He was referring to the constant study of car prices, which is one of the main causes of inflation.
“For the Fed, this report provides another wake-up call. Inflation has arrived and continues to make your presence widely known,” said Alexander Lin, an economist at Bank of America Securities in New York. “We believe today’s printing allows the Fed to move faster, and the market will likely encourage the Fed to raise 50 points at the next meeting.”
High inflation, exceeding the Fed’s target of 2 percent, could jeopardize Biden’s economic agenda. Biden in a statement acknowledged the hardships faced by American families, but noted that “there are indications that we will overcome this challenge.” He was referring to the constant study of car prices, which is one of the main causes of inflation.
“For the Fed, this report provides another wake-up call. Inflation has arrived and continues to make your presence widely known,” said Alexander Lin, an economist at Bank of America Securities in New York. “We believe today’s printing allows the Fed to move faster, and the market will likely encourage the Fed to raise 50 points at the next meeting.”