Worst is yet to come for U.S. inflation as Fed, Biden feel heat
BNN Bloomberg
After U.S. prices climbed by the most in three decades, there’s even worse news ahead for households and policy makers: Inflation likely has further to rise before it peaks.
After U.S. prices climbed by the most in three decades, there’s even worse news ahead for households and policy makers: Inflation likely has further to rise before it peaks.
October’s annual rate was 6.2 per cent, the highest since 1990, as price increases spread well beyond the parts of the economy most disrupted by pandemic closures. Key drivers, like hot housing markets and a global energy crunch, show few signs of fading away soon -- leading economists to predict even bigger jumps in the coming months.
“We’re going to see the inflation picture get worse before it gets better,” said Sarah House, senior economist at Wells Fargo & Co. She doesn’t expect much relief before next spring.
For the Federal Reserve, and President Joe Biden, that likely seems a long way off -- and pressure for a change of policy course will ratchet up in the meantime, as calls to rein in pandemic support grow louder.
Surging prices are eating into family budgets, wiping out the wage increases that U.S. workers have battled for after last year’s jobs wipeout, and squeezing profit margins for small businesses.