(TheDailyHorn.com) – No matter how much the Biden administration tries to spin the news, the facts don’t bear out much of the rhetoric. On Tuesday, December 15, President Joe Biden spoke to donors at the Democratic National Committee’s annual holiday party. He spoke of his first year in office as a smashing success and warned Republicans they would lose in the 2022 midterm elections.
Unfortunately for Biden, the facts don’t agree with his assessment. In his speech, the president left out a glaring reality that many Americans face. Inflation is skyrocketing at a phenomenal rate, making some question why the president didn’t bother to mention his plan to solve the problem. Could it be that he doesn’t have one?
A new report shows that things may be worse than we thought.
Inflation Continues to Get Worse
During the Christmas season, many Americans are more conscious of their spending than at other times of the year. While Biden’s polls have been in the basement since August, the key polling metric for the economy and inflation is getting worse. According to a new ABC News-Ipsos poll released on December 12, 69% of US residents disapprove of how the president is addressing inflation. Perhaps that’s why he didn’t address the rising cost of prices with his donors on Tuesday evening?
Plus, there’s this. Hours before Biden declared Democratic victory in 2022 among Democratic mega-donors, the Labor Department released new data on wholesale prices. If you thought the previous week’s report on consumer prices was bad (it stated prices rose 6.8% in November over a year earlier, a 40-year high), the wholesale prices were even worse. They rose 9.6% over November 2020. It was the largest jump since 2010 when the Labor Department created the current tracking metrics.
Interest Rate Rises Are on the Horizon
To control inflation, the Federal Reserve intends to withdraw cash from the economy by slowing consumer demand through increased interest rates. The Fed intends to implement several rate increases in 2022. Those adjustments will cause mortgages, car loans, credit cards, and business loans to become more costly to consumers.
What does that mean to you? Well, it means the prices on virtually everything you buy will go up even more in 2022. Even if the Federal Reserve successfully slows demand and curtails inflation, there will be a tradeoff as the cost of new mortgages and loans rise. During the transition in 2022, Americans could get a double whammy as inflation remains high while increased interest rates cause more expensive credit. Plus, businesses may not decrease prices much if the cost of their loans puts a dent in profits.
While Biden tries to spin his way out of the mess, Americans live it daily. The only one benefiting from higher costs is the Federal Treasury.
Merry Christmas to them.
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