Biden's administration is unable to address the price hike... What next?

Washington

Six months after asserting that the inflation in the United States is a "short-term incident, not a long-term problem", Commerce Secretary Gina Raimondo refused to admit her mistake, in an interview with CNN. It is impossible to predict that Russian President Vladimir Putin's war on Ukraine will lead to such a rise in gas and oil prices, or that the recovery from the consequences of "Covid-19" will be so slow.

In contrast to Raimondo, Treasury Secretary Janet Yellen admitted her earlier estimates were wrong when she downplayed how dire the US economy was.

Speaking before the Senate yesterday, Yellen, who previously chaired the Federal Reserve, said, “We currently face challenges on the macroeconomic front, including unacceptable levels of inflation as well as the negative impact associated with the disruption caused by the impact of the Corona pandemic on supply chains and the effects of the oil and food market disruptions. resulting from Russia's war on Ukraine.

Americans are increasingly feeling the harsh economic conditions, with the absence of any glimmer of hope that they will end soon.

bleak scenarios

Jamie Dimon, CEO of JPMorgan & Chase, one of the largest US banks, considered that there is a “storm looming on the horizon for the American economy” and indicated that the pillars of the economy are strong, but he is not sure that “it is still In consumers' pockets what can be spent."

The US economy is witnessing a continuing rise in consumer spending, but the continued rise in inflation rates still threatens to cause a recession in the near future.

"Everyone thinks the Fed can handle inflation," Dimon told an investment conference. "There's a hurricane coming in our way, we just don't know if it's a little hurricane or a giant storm, or something like that, and it's better that we... Prepare yourself for what's to come."

Prepare for the next recession

The Federal Reserve is preparing for what it considers signs of a looming economic recession, and the bank has taken the initiative to try to tame the inflation rates that have achieved the highest rise in the past 40 years, by raising interest rates in order to control consumer demand sufficiently so that prices stop rising, without crushing it to the point of tipping the country into recession.

Indeed, the bank raised the interest rate twice, and is expected to raise it four more times in the remainder of 2022, and these increases resulted in one of their dimensions, a decrease in the total GDP.

Federal Reserve data reveals that the economy grew at an annualized pace of only 0.9% during the first three months of this year, a sharp decline from its previous estimate of 1.3%.

And if the decline in the volume of the gross national product continues to reach 6 months, this will mean officially entering the stage of economic stagnation, as recessions are technically defined by negative growth rates in two successive quarters of economic growth.

Continuing price hikes

Although the United States has become the largest producer of oil and gas in the world, the rise in gasoline prices continues, which negatively affects families, without any signs of a drop in prices soon.

Since President Joe Biden came to power in January 2021, domestic oil and gas prices have jumped by more than 100%.

Gasoline prices set a new record this week, with the price of a gallon of regular gasoline reaching an average of $4.9 (not adjusted for inflation), according to the latest data from the American Automobile Association (AAA).

The state of California recorded the highest average price, with the price of a gallon reaching $6.3, while it arrived in Washington, DC, $ 5.1. And Andrew Gross, a spokesman for the American Automobile Association, said in a statement, "Citizens continue to consume gasoline despite these high prices. At some point, Drivers may change their daily driving habits or lifestyle due to these high prices, but we are not there yet.”

In response to the persistent hikes in gasoline prices, David Holt, president of the Consumer Energy Alliance, whose members include many oil and gas companies, called for an increase in US oil and gas production.

Gasoline prices set a new record, bringing the price of a gallon of regular gasoline to $4.9 (Reuters)

Americans are angry

The Energy Information Administration predicts that, for consumers, the average American household will have to spend about $450 more on gasoline this year than they did in 2021, accounting for inflation.

With the midterm elections approaching, most Americans say the economy, inflation and high gasoline prices are the most important issues in determining how to vote for Congress next November, according to a new poll of more than 542 Americans, conducted by ABC News. News) and the Ipsos Foundation.

With the continued rise in inflation rates, Americans complain greatly about the high prices of all goods and services, and 83% of citizens say that the economy will be a very important issue in determining how they vote in the upcoming elections.

Support for Biden's approach to economic issues dropped to only 37%, which confirms that there is a problem for the president and Democratic candidates before the upcoming elections.

Bruce Pearl, Louisiana's Oberon University basketball coach, tweeted, "Your Socialist government's spending flooded our economy as it was recovering from the Covid pandemic, creating inflation! Your energy policy has caused gas shortages and record prices, your policies." You hurt the working class, step aside, change your politics, do something different please."