The Vice Chair Of the US Fed just delivered some very bad news to the Biden administration after the “surprising” report about the increase of inflation.
For the second time this week the Fed’s hopes were foiled after reports show inflation is rising faster than expected and the April jobs report was bleak. Fed Vice Chair Richard Clarida said they were taken aback by the inflation report and called the April jobs numbers the “biggest miss in history.”
Clarida hopes that the rise in prices is temporary but that the weak employment report is making things “more uncertain.”
“We would not hesitate to act to bring inflation down,” Clarida said. But “this is one data point, as was the labor report … We have been saying for some time that reopening the economy would put some upward pressure on prices.”
U.S. consumer prices increased 4.2% in April, compared with a year ago. In 2020, before this increase, one in five Americans already reported struggling to afford food at some point in the past 12 months. https://t.co/LVhlcagmiz pic.twitter.com/K1GgDULwcj
— GallupNews (@GallupNews) May 12, 2021
One of the largest problems is that Biden wants to approve massive spending bills that would make the stagflation during the Carter administration look good.
Republican Governors are quietly doing what they can in their states to insulate them from the upcoming pain by ending federal unemployment benefits. Many on the program were making more on unemployment than they were when employed. As a result, governors are terminating the program to influence people to get back to work.
The rise in CPI was not as expected. The consensus was 0.3% m/m on the core CPI. We got 0.9%. And none of the m/m change is base effects. This miss was comparable in magnitude to Friday’s payroll shortfall. (Don’t take it from me – look at the bond market.) https://t.co/mhXrGcO1BM
— Greg Ip (@greg_ip) May 12, 2021
