Joe Biden Admits to Elite Donors that Inflation is Here to Stay

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    Two-thirds of Americans believe that inflation is likely to increase in the coming years, according to a survey that was conducted in conjunction with The Washington Post and George Mason University's Schar School of Policy and Government.

    The rate of inflation climbed to the highest level in 40 years at the end of March, with the total price of goods and services climbing 8.6 percent over the last year. The April consumer price report indicated a mild decrease towards an 8.3 percent increase in prices in comparison to the previous April. It is anticipated that the price will drop back by 8.2 percent after the Bureau of Labor Statistics reports prices for May on Friday.

    A majority of families believe that inflation will be much worse in the coming 12 months, while another 36 percent believe that the current situation of rising prices is likely to get more severe. 10 percent of respondents said they anticipate inflation to remain roughly the same. Only 21 percent believe inflation will rise slightly, and 7 percent anticipate the inflation rate to rise rapidly.

    Wall Street economists think the rate of inflation topped out in March. They predict it will fall at the close of the year. It will be lower in the coming year, even if it remains high in comparison to the past two decades, and over the Fed's goal for an average of two percent. Bank of America economists have predicted U.S. inflation falling to 6-percent in the 12 months to percent by the end of December.

    Federal Reserve officials were also positive at their March meeting. They use a measurement called the Personal Consumption Expensivity price index to forecast and target inflation. It is usually lower than CPI and shows that prices increased by 6.6 percent during March. Core PCE inflation that excludes fuel and food, increased by 5.2 percent. In the March forecasts, the median estimate of Fed experts was for PCE inflation to decrease by 4.3 percent by the end of the year and for the core inflation rate to fall by 4.1 percent.

    The Fed has not released projections from the May meeting, however its estimates for year-end inflation are likely to increase during the June meeting scheduled for the following week. In an effort to fight inflation, the Fed increased its target for interest rates to 25 basis points during March, and 50 basis points by May. It is anticipated to raise it by another 50 basis points next week and at its July meeting. In addition, the Fed is also reducing the balance of its books by not taking on bonds, allowing for the possibility of a $47.5 billion run-off throughout the month and into summer. Then it will rise to $95 billion by September.

    The Congressional Budget Office recently projected PCE inflation to rise 4.0 percent in the coming year, which is a much more positive prediction than the Fed's. The budget of President Joe Biden, which was announced in March, predicted CPI to increase by 4.7 percent this year, and only 2.3 percent in the next.

    37 percent of Americans think that high-priced food is an important source of financial strain for their family. Another fifty percent consider them to be an insignificant source of financial trouble.

    Nearly 9 out of 10 Americans report that they are struggling with high costs by looking for lower-cost products. About three quarters of respondents say they are cutting back on entertainment and dining out. Seventy-four percent of respondents said they were postponing purchases they had planned and 52 percent admitted they were rushing to purchase products prior to anticipated price hikes. 49 percent of people say they have saved less.

    A separate survey conducted by The Economist and YouGov revealed that 70 percent of Americans think their family has been negatively affected by the rise in inflation. Sixty-six percent of them said they see the problem of inflation as extremely important, and 63 percent stated that it's a major issue for the nation.

    The Economist/YouGov survey found the fact that 44 percent of people believe that Biden is a major source of the blame for rising prices, while another 30 percent believed that Biden is responsible in some way. The Economist/YouGov survey was conducted from June 4th to 7th.

    The Washington Post/Shaar survey, taken between late April and early May, revealed that 40 percent of respondents said they blame Biden for a large amount of inflation, while another quarter believed he deserved some part of the blame. The total of 58 percent was similar to the proportion of people who blame the outbreak of covid for disruptions. More shares blamed profit-seeking by corporations (72 percent) as well as that of the Russian invading Ukraine (69 percent). The percentage of blame for Biden is increasing but has been ranging from 49 percent at the end of November, and fifty percent by February and the rise is largely from people who say Biden's presidency is to blame.

    The major gap between the opinions of the American public on the other side, and the opinions of Wall Street and the Fed may be because of differing views on the rising cost of living. Wall Street and the Fed will say that inflation is improving as long as prices are increasing at a rate of 4 to 5 percent by the year's end since they are watching the speed at which prices change. For many households this could feel like an increase in the circumstance since prices would increase in price every month.

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