According to analysts, President Biden’s speech downplaying inflation is out-of-touch and makes the government unrelatable to most Americans. Despite recent interest rate rises from the Federal Reserve, annual inflation topped 9.1% in June. Last month, consumer prices jumped 1.3%, raising the cost of food and petrol.
Biden recognized that inflation remained “unacceptably high” but minimized the relevance of the new statistics, calling them “out-of-date” since it doesn’t represent the fall in gas prices not included in the June report.
Biden’s message may be unsuccessful, say experts.
Derek Tang, the co-founder of Monetary Policy Analytics, stated Biden’s inflation statement was “tone deaf”
“Telling them this version is outdated because it lacks the newest data won’t go down well,” he said.
Since last month’s oil price increase, which caused half of June’s inflation, gas prices have fallen. Biden said the savings “provide space for American families” and noted that wheat prices had also fallen but were not represented in the report.
Neil Bradley, U.S. Chamber of Commerce chief policy officer, said the White House’s outdated rhetoric misses the point.
“Whether it’s 8% or 9%, both are too high, and the actual problem isn’t the data time frame,” he added. “We have significant inflationary pressures, and although the Fed is doing its part on the demand side, policymakers need to do their bit on the supply side, and that’s not occurring.”
Oil and wheat prices weren’t the only things hurting Americans in June. Other than airfares and hotel rooms, prices climbed higher in June and show no signs of stopping.
According to the CPI statistics, inflation outside of food and energy touched 0.7% in June and 5.9% over the last year, while shelter costs jumped 0.6%. Auto repairs, dental bills, health, and auto insurance all jumped 2%.
The June CPI was terrible. Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said Thursday that the next issue is whether they will be replicated.
Biden has few straightforward alternatives to contain soaring inflation, a worldwide challenge partly caused by his March 2021 fiscal boost. A series of supply shocks from the COVID-19 epidemic and Ukraine conflict also drove prices upward, catching the Federal Reserve off-guard and forcing swift rate rises.
Voters want proactive leadership, not reactive. They want to know what policymakers are doing to assist them to afford trips to the grocery store or home from work, said Rachel Snyderman of the Bipartisan Policy Center.
She stated that since high inflation began last autumn, a drop would be modest and inflationary pressures will endure months. This won’t help Biden in November’s midterm elections.
42% of Americans blame Biden for the economy, according to his plummeting popularity rating. This week, even Democrats showed record-low support for Biden’s 2024 reelection.
As the Fed raises interest rates to control inflation, many fear a recession.
Biden urged Congress to decrease the cost of prescription medications and health insurance this month to battle inflation. The “anti-inflation reconciliation measure” is part of the president’s unsuccessful Build Back Better program.
Bradley slammed the measure as the same Build Back Better program, which failed due to inflation fears.
“This is the same plan, the initial argument for this agenda had nothing to do with inflation,” he remarked.
Republicans focus on the effect on consumers and how inflation isn’t decreasing.
Rep. Kevin Brady (R-Texas) noted last week that months of rising inflation imply increased costs and no respite for consumers.
Biden and Democrats say inflation is high worldwide, but the U.S. has recovered swiftly. The American economy restored all 21 million jobs lost to the epidemic and added 2.7 million in 2022. Unemployment is 3.6%, barely 0.1% higher than before the outbreak.
The U.S. economy’s resiliency is mixed for fighting inflation, say, economists.
Job growth and increased consumer spending despite high inflation suggest the U.S. can manage higher interest rates. But stable expenditure and high demand for labor are fueling inflation.
Snyderman said the Fed is the main economic instrument. Biden has stated he’ll allow the Fed flexibility to fight inflation.
“We’ll still be watching the Federal Reserve and prospective interest rate rises,” Snyderman added.
“It’s impossible to anticipate where inflation will rank among other voter-turnout problems. I believe it will be a top topic in the next months.”
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