Despite the Federal Reserve’s efforts, high inflation persists due to the growing deficits and the nation’s $33 trillion national debt, indicating that Congressional action to control spending may be the only effective solution to address this ongoing issue.
Yes, and increase in rates is a huge problem too. With $33.529 trillion in debt, if the US refinanced the debt at the current low end of yield curve (10-yr at 4.81%), annual interest expense would be $1.6 trillion, nearly double the top of this chart.t.co/MLnYFsU229
— David Sommers (@dgsommersmkts) October 17, 2023
Until Congress Gets the Deficit Under Control Inflation Won’t Go Away
Inflation remains high despite the Federal Reserve’s efforts. With a 3.7% rise in prices over the past year and “core inflation” at 4.1%, the Fed’s rate hikes haven’t curbed inflation to their 2% target. The crux lies in the U.S.’s $33 trillion national debt and growing deficits. While higher interest rates were meant to suppress inflation, they exacerbated the government’s deficit. The fiscal response anticipated from Congress to balance monetary policy hasn’t materialized. Experts suggest only a reduction in spending can genuinely control inflation, a step Congress hasn’t taken. Thus, high inflation continues.
Food Inflation Is Crushing Millions Of Low-income Americans
In 1906 Alfred Henry Lewis once highlighted the fragile line between stability and chaos. Today, unchecked U.S. monetary practices have driven alarming inflation, particularly in food. Despite official figures, the reality is grim, especially for lower-income families. With cuts to SNAP benefits and rising costs, food insecurity is escalating. Amid debates on government spending, essential needs are sidelined for other initiatives, pushing many Americans closer to a breaking point.
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