U.S. inflation continues to deteriorate, hitting a record high in 40 years. U.S. President Biden said in a statement on Thursday (10th) that he expects U.S. inflation to slow sharply by the end of 2022, in an attempt to appease the panic-spreading market.
Thursday (10th) The US consumer price index (CPI) in January increased by 7.5% year-on-year, exceeding market expectations of 7.2% and hitting a new high since February 1982. The core CPI, excluding food and energy prices, was higher than last year. It rose to 6% over the same period, the highest since September 1982.
The news prompted both stocks and bonds on Thursday, with the 10-year U.S. Treasury yield rising above 2%, the Dow Jones falling more than 500 points, and the Nasdaq down 2.1%.
In his latest statement on Thursday, Biden said: “While today’s CPI numbers are up, inflation is projected to slow sharply by the end of 2022… Fortunately, we saw positive real wage growth last month and car prices moderated last month. down. And last year, car prices accounted for regarding a quarter of overall inflation.”
Biden added: “We will continue to fight for spending on prescription drugs, care for young children and the elderly, and energy costs, areas that have held back families and working classes for decades.”
Inflation has evolved into one of the major economic problems of the Biden administration, eroding the purchasing power of U.S. consumers if wages do not rise proportionally, leading to a drop in real household income.
In the year to January, fuel prices rose 46.5% for the year, gasoline prices rose 40%, used cars rose 40.5%, new car prices rose 12.2%, meat, fish, poultry and eggs rose 12.2%, bread and cereals Foods rose 6.8 percent. These are making Americans’ wallets thinner and thinner.
Both Biden and U.S. Treasury Secretary Janet Yellen have recently expressed their agreement that the Federal Reserve (Fed) shrinking its balance sheet and raising interest rates can improve inflation, but the White House does not have many tools, and the power to control price increases in the short term is limited, including using Strategic Petroleum Reserves, propping up U.S. supply chains, and encouraging workers to return to work. Biden-backed infrastructure investments might lower inflation, but the effects will take years to show.
According to a recent poll conducted by the US online media POLITICO and the polling agency Morning Consult, 73% of the voters who put the economy as the top issue said that the US government Going down the wrong path, Biden’s governance satisfaction is now consistently below 40% and is still falling.