How Concerned Should Consumers Be About Four-Decades High in Inflation?

With inflation surging to a new four-decade high, should consumers expect the U.S. to fall into a recession or will the economy take a more optimistic turn?

Outlets across the spectrum on Wednesday highlighted that the consumer price index increased 9.1% from a year ago in June. Despite the Federal Reserve's attempts to slow economic growth by raising its benchmark interest rates, inflation has continued to climb for eight consecutive months. The restricted supply of consumer goods, embargos on Russian oil and rebounding from the COVID-19 pandemic were cited as top factors for historic inflation increases. Higher inflation rates have caused many Americans, including high earners, to be cautious about their spending habits. 65% of Americans who earn six figures said they were "very concerned" about rising consumer prices, according to a Morning Consult/CNBC poll.

Some left-rated voices suggested that the Fed should be less concerned about an "already-fading" inflation rates and more focused on preventing a recession, which "directly reduces economy-wide incomes." Conversely, many right-and center-rated voices accentuated that "a reality check is in order," ultimately warning Americans to "beware wishful thinking" about avoiding a recession.