Economists predict trouble for President Biden as the November election approaches, leaving his administration with little time to address the high inflation plaguing Americans.
Inflation is currently running at 3.3% year-over-year, according to Labor Department data, down from a near-record 9.1% in June 2022 but still higher than at any point in the past decade before Biden took office.
The Federal Reserve Board on Wednesday Maintaining the Federal Funds Rate Range The policy rate is set at 5.25% to 5.5% and has remained stable since July last year, a decision that is expected given that inflation in the 12 months to May was lower than expected and the core consumer price index rose 3.4% above expectations.
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From left: Former President Trump, Federal Reserve Chairman Jerome Powell, and President Biden. (Getty Images/File)
Chairman of the Federal Reserve System Jerome Powell He said the report added confidence that inflation was heading towards the 2 percent target, but added that more evidence was needed before the central bank began easing policy.
Economist Peter Morici said the report was “certainly good news” for Biden, but noted that “prices are still rising, this is just one report,” and that the factors influencing the report weren’t most Americans’ wallets.
“[The report] “Falling energy prices are the main driver. Inflation remains very strong in the services sector. Housing and accommodation costs are rising 5 percent annually,” he said, adding that energy prices are volatile and can change significantly in a single month.
“The underlying causes of inflation plaguing the Fed are still there. The Fed is unlikely to cut rates significantly this year, and even if it did, it would be too late to provide much help to Joe Biden.”
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Economist Peter Morici. (Fox News/File)
Joseph LavorgnaJonathan Brown, an economist who served as chief economic adviser to former President Trump, told Fox News he doesn’t think inflation will fall, but also said before the report that the Fed “doesn’t want to move quickly.”
“If I were advising the president, I would want to act to keep inflation as low as possible,” he said. “I would argue that the administration has unfortunately pursued policies that have made the inflationary situation worse.”
“Never in the history of our economy have we had budget deficits above 5% of GDP and unemployment below 4%. That’s a recipe for high inflation, and that’s where we are now,” he said. “Unfortunately, I’m concerned that the only way we’re going to get inflation down, at least to the level that the guidelines require, so that people don’t feel the pain of higher prices, is if we have a recession.”
Dr. Arthur LafferJohn Biden, an economist who worked in both the Reagan and Trump administrations, said he couldn’t predict how the economy and inflation would affect the overall outcome of the next election, but argued that the Biden administration has destroyed key economic “kingdoms” by making misguided moves on taxes, government spending, monetary policy, regulation and trade.
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Arthur Laffer. (Jim Watson/AFP via Getty Images/File)
“You look at the Five Kingdoms, you look at taxation, he’s moving in the wrong direction. Government spending? He’s moving in the wrong direction. A sound currency? He’s moving in the wrong direction. Regulation, particularly on energy but also on other things, he’s moving in the wrong direction. Trade? He’s moving in the wrong direction,” Laffer said.
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“I can’t imagine an administration that’s more at odds with what needs to be done, and the results are pretty clear,” he added. “Employment is still not back to pre-pandemic levels. Price levels have gone up substantially. Interest rates, the list goes on and on. That’s what I think objectively as an economist.” [Biden] He doesn’t know economics, and neither does his administration.”
But when it comes to elections, “you’ve got to get out the Ouija board,” Laffer said.
FOX Business’ Nora Colomer contributed to this report.
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