By Ryan McMaken
When asked about price inflation in his Sunday interview with 60 Minutes, President Joe Biden claimed that inflation “was up just an inch … hardly at all.” Biden continued the dishonest tactic of focusing on month-to-month price inflation growth to obscure forty-year highs in year-over-year inflation. This strategy may yet work to placate the most ignorant voters, but people who are paying attention know that price inflation continues to soar.
Thus, while Biden may be pretending that it’s all no big deal, the Federal Reserve knows it better do something about price inflation, which even the Fed now admits shows no signs of even moderating.
On Wednesday, the Fed’s Federal Open Market Committee announced that it will again raise the federal funds rate by 75 basis points. According to the FOMC’s press release:
Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures….
The Committee decided to raise the target range for the federal funds rate to 3 to 3-1/4 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.