Payne Capital Management President Ryan Payne and TJM Institutional Director Jim Jurio reveal how consumers can react to record-breaking inflation in Money Making.
Finance Minister Janet Yellen said on Tuesday that the United States was facing “unacceptable” levels of inflation as a result of the COVID-19 pandemic and the Russian war in Ukraine, and promised to reduce the prices of everyday goods with an “appropriate” budget position.
“We are currently facing macroeconomic challenges, including unacceptable levels of inflation, as well as headwinds related to the disruptions caused by the pandemic effect on supply chains and the effects of disruptions in oil and food markets as a result of the war. of Russia in Ukraine, “Yellen said in prepared notes as he testified before the Senate Finance Committee.
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Yellen said elements of President Biden’s proposed spending legislation – including reform of the prescription drug market and clean energy initiatives – could help cut costs for many American families.
But she suggested several solutions to cool the hottest inflation in nearly four decades, noting that any action by the White House or Congress would only act as a follow-up to steps taken by the Federal Reserve.
Janet Yellen speaks at a hearing of the Finance Committee of the House of Representatives in Washington, DC, December 1, 2021 (Al Drago / Bloomberg via Getty Images / Getty Images)
“In order to reduce inflationary pressures without undermining the strength of the labor market, an appropriate budgetary position is needed to complement the Federal Reserve’s monetary policy,” she said. “In the future, elements of the legislation proposed by the president – including clean energy initiatives and plans to reform the prescription drug market – could help reduce the costs paid by American consumers.
Last week, the White House began taking steps to tackle rising voter unrest over rising inflation, stressing that officials are doing their best to bring prices under control ahead of the November midterm elections, in which Democrats risk losing their already thin majority.
Biden called tackling inflation his “top priority” during a rare meeting in the Oval Office last week with Fed Chairman Jerome Powell, although he also tried to deflect rising prices, saying the fight against inflation largely falls within the competence of the central bank. The White House is increasingly trying to shift responsibility for dealing with Fed prices – as studies show that inflation, which has been nearing a 40-year high for months, is a major concern for voters.
.Man passes US Federal Reserve in Washington on April 29, 2020 (Xinhua / Liu Jie via Getty Images / Getty Images)
“My plan is to deal with inflation. It starts with a simple proposal: Respect the Fed, respect the independence of the Fed, which I have done and will continue to do,” Biden said.
A report by the Ministry of Labor last month said the consumer price index jumped 8.3% in April, stressing that inflationary pressures in the economy remain very strong. On top of that, gas prices reached a new record on Tuesday, with one gallon of gas costing an average of $ 4.91 – 40% more than a year ago.
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Most economists now expect higher prices to persist throughout the year, exacerbating the political headaches for both Biden and the Fed. Since then, administration officials have admitted that they did not expect last year to develop as it did.
“I think I was wrong then about the path that inflation will take,” Yellen said last week in an interview with CNN. “There were unexpected and big shocks that raised energy and food prices, as well as supply difficulties that badly affected our economy, which I … at the time didn’t fully understand.
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