Staff Reports
Wall Street did not react positively to the most recent report of the Federal Reserve’s preferred inflation measurement, the personal consumption expenditures (PCE) price index. The PCE reading released on Friday indicated a month-over-month inflation of 0.6 percent, surpassing the estimated 0.4 percent, which led to a drop of one to two percent in the Dow Jones, S&P 500, and Nasdaq during the first hour of trading. This increase is the PCE’s highest since June of last year and is similar to inflationary surges recorded by the Consumer and Producer Price Indexes. PCE inflation also exceeded the anticipated 5.0 percent with a year-over-year increase of 5.4 percent. In the beginning of 2023, PCE demonstrated an accelerating inflation trend on both a monthly and yearly basis.
Wall Street investors turn bearish as market futures sink amid the latest inflation data report. pic.twitter.com/sU1fXyweCq
— Yahoo Finance (@YahooFinance) February 24, 2023
Despite the efforts of the Federal Reserve, they have been unable to reduce inflation to their target of two percent, and it appears that they may need to increase interest rates even further to achieve this goal. As a result, the possibility of an economic “soft landing” as it slows down is diminishing. Additionally, President Joe Biden will have to confront a slowdown in GDP, rising unemployment, and various other consequential economic challenges leading up to the 2024 election.
INFLATION: HEATING UP, NOT COOLING DOWN. The personal-consumption expenditures price index—the Fed’s preferred gauge of inflation—higher in Jan. than Dec. The core PCE, excluding food and energy prices, UP ⬆️ 4.7% in Jan. from a year earlier, picking up steam from Dec.
— Dagen McDowell (@dagenmcdowell) February 24, 2023
It is clear that President Biden’s policies have failed to bring inflation under control and have instead led to an increase in inflation. The Federal Reserve’s decision makers will meet again on March 21-22 and it is likely that they will be forced to raise interest rates even higher in order to combat this rising inflation. This could have a devastating effect on the economy and could lead to a recession in the second half of President Biden’s term.
It is time for President Biden to take responsibility for his failed economic policies and take action to address the rising inflation. The Federal Reserve can only do so much and it is up to the President to enact policies that will help bring inflation down and get the economy back on track. The American people deserve better than this and it is time for President Biden to step up and do what is necessary to get the economy back on track.
Source: Townhall
