Inflation Continues to Plague Economy

… “Time and patience” are two things Joe Biden can’t afford. Unless he can get that inflation number below 2.5%, his re-election will be in enormous trouble.

Fed officials have been debating how long they need to leave rates at their current level, about 5.3 percent. Elevated borrowing costs make it expensive for people to borrow to buy a house or expand a business, and that can weigh on the economy over time. While the Fed has been trying to tamp down demand enough to bring inflation under control, officials want to avoid crushing growth to the point that it leads to widespread job losses or a recession.

But some economists have been worried that it could be harder to slow inflation the rest of the way than it has been to achieve the progress so far. And Fed officials want to avoid lowering interest rates too early, only to find out that inflation is not fully quashed.

… Originally, the Fed planned a total of three interest rate cuts to bring the rate below 4%, but the latest inflation data should give the Federal Open Market Committee pause in initiating any interest rate cuts.