The truth about who or what is actually at fault for inflation numbers not seen since the 1980s is more complex than any political talking points or anti-Fed screeds.
President Joe Biden blames Vladimir Putin. Republicans blame Biden and the Democrats. Some economists and Wall Streeters put it all on the Fed.#democracy #freedom
Everyone is pointing fingers over the dramatic spike in inflation in the U.S. over the past year that has wiped out wage gains, driven stocks to their worst start to a year since 1970 and generally put Americans in a funk about the nation’s direction.
A key reading on inflation released by the Labor Department Friday rose at a 6.3 percent annual rate in April, down from 6.6 percent in March but still highly elevated. The figure, called the Personal Consumption Expenditure index, covers the broadest range of goods of all the inflation measures and is closely watched by the Federal Reserve.
Politicians on both sides will look to spin the numbers to their advantage. But the truth about who or what is actually at fault for inflation numbers not seen since the 1980s is more complex than any political talking points or anti-Fed screeds.
“It’s not just the Fed or the end of infrastructure or the exact kind of stimulus or any one single thing,” said Harvard economist Megan Greene. “I actually thought the Fed had pulled it off last year waiting for inflation to come down on its own as the pandemic waned. Then Omicron hit China and Russia invaded Ukraine. A lot of this is just very, very bad luck.”
Here’s what the numbers show and what experts told POLITICO about what’s behind an inflation rate that has driven 75 percent of Americans to say the nation is on the wrong track and squashed Biden’s approval rating below 40 percent.
Spoiler alert: There are no single villains. And it’s all quite complicated.