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The Fed is aiming for an average annual price gain of 2 percent over time, a target it sets using a different index. Still, the CPI is watched closely because it comes out faster than the Fed’s preferred indicator and feeds the preferred figure. also accelerated.
Republicans pointed to an argument against the rapid price hikes as a sign of the Biden administration’s economic mismanagement and the additional spending that President Biden is demanding as part of his $4 trillion economic agenda, including investments to fight climate change and support education. and improve child care.
“Bidenflation is growing faster than paychecks, it’s destroying workers’ pay rises and outstripping American families,” he said in a press release following the Republicans data report at the House Ways and Means Committee.
The conversation was influential, as the latest force in inflation outstripped the surge many officials expected. Biden’s official budget request, released this springofficials forecast an inflation rate for 2021 that remains near historical averages, and never exceeded 2.3 percent per year for ten years. Management officials are starting to recognize that high inflation could stay in the economy for another year or two.
The possibility of inflation not decreasing as fast or as expected becomes one of the decisive economic risks of the age. Signs abound that strong demand may support prices, at least for a while. A New York Fed poll on Monday showed that Consumers expect to continue spending Strongly next year.
Some members of the business community feel that price pressures are permanent.
PepsiCo’s CFO Hugh Johnston told analysts on Tuesday that the company expects more inflationary pressure through higher costs for raw materials, labor and freight. “Are we going to price it to deal with it? We certainly are,” he said.
Jamie Dimon, CEO of JPMorgan Chase, told analysts on a conference call Monday, “It’s going to be a little bit worse than the Fed thought. I don’t think everything will be temporary. But it doesn’t matter if we have very strong growth.”
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