How Will the Government Tackle High Inflation?
Summary from the AllSides News Team
High prices are impacting just about everyone, from grocery stores and gas pumps to the White House and 2022 candidates.
Consumer inflation is at its highest point in 40 years, and prices for producers are also near record highs. Despite high inflation, retail spending rose faster than expected in January, which acts as evidence of a strong economy along with continued jobs growth. Reports across the spectrum say that Federal Reserve officials voiced concern about inflation during their January meeting and discussed raising interest rates faster than previously planned to combat high prices, potentially as early as March.
Reports across the spectrum highlighted the political pressure inflation puts on Biden and Democrats heading into the 2022 midterm elections, and how concerns about inflation conflict with Biden's spending plans. Many sources focused on how inflation hurts voters by raising prices and weakening wages. Some coverage from left-rated sources highlighted voices who were optimistic about inflation ending sooner, and argued that higher interest rates could cause lower wages and fewer jobs. Reports from right-rated sources more often focused on the extent of high retail prices and framed Biden's spending plans as excessive and a driver of inflation.
Featured Coverage of this Story
From the Right
Fed signals 'faster' interest rate hikes likely as inflation soars to 40-year high
Most Federal Reserve officials agreed last month that surging inflation and an incredibly tight labor market could warrant a faster-than-expected pace of interest rate hikes this year as policymakers look to combat soaring prices.
Minutes from the U.S. central bank's Jan. 25-26 meeting show that many policymakers believe the current economic conditions could necessitate a quicker normalization of policy than in 2015, though they stressed that this outlook ultimately hinged on financial developments. The Fed kept rates ultra-low for years following the 2008 financial crisis, only raising them once at the end of 2015....
From the Left
Biden's inflation Catch-22
President Biden and his top advisers are caught in a loop: They know inflation wounds them politically and hurts their voters, but scrapping some inflationary policies would wound them politically — and hurt their voters.
Why it matters: The president remains committed to the core elements of his economic program, even as price hikes threaten to wipe out Democrats in November's midterms.
His approach includes imposing strict "Buy American" requirements on all federal spending, and, so far, maintaining President Trump's tariffs on China.
Both of those hardline policies put upward pressure...
From the Left
The Fed's battle to fight inflation could cause more pain than higher prices 
Rapidly rising prices have caused economic hardship for millions of Americans. But drastic action to rein in prices could lead to even more pain, including job losses.
Overall prices jumped 7.5% during the last year, according to the January consumer price index reading, the fastest pace in nearly 40 years. The increases have squeezed household budgets for consumers, caused political problems for Joe Biden and resulted in calls for the Federal Reserve to take relatively severe action, such as its first half-percentage-point hike since 2000.
But some economists are cautioning that would be a very bad idea,...
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