Inflation neared a four-decade high in December, as rising prices fueled consumer fears about the economy.
The consumer price index rose 7% in December from a year ago, according to a new Labor Department report released Wednesday.
The CPI, which measures a bevy of goods ranging from gasoline and health care to groceries and rents, jumped 0.5% over the month of November.
The surge in prices was the sharpest increase since June 1982, when inflation hit 7.1%.
Core prices, which exclude food and energy, climbed 5.5% in December from the previous year – a sharp increase from November’s 4.9%.
The White House blamed the price spike on supply-chain bottlenecks and other pandemic-related challenges in the economy, while Republicans laid the blame on Biden’s massive spending agenda.
Economists expect the Federal Reserve to begin hiking interest rates as soon as March to combat surging prices. Hiking interest rates raises the cost of consumer and business loans, which slows the economy by forcing them to cut back on spending.
A hike in rates will do nothing to combat supply-chain issues, the labor crisis, nor surging energy costs. The Fed’s move will also serve to make mortgages for first-time homebuyers less affordable.
But don’t worry. The Fed and the White House are experts on this stuff. They know exactly what they’re doing… In no way whatsoever.